A slowdown in economic growth in the US; unemployment falls in Western Europe: Economic wrap

A slowdown in economic growth in the US; unemployment falls in Western Europe: Economic wrap
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Updated 28 October 2021

A slowdown in economic growth in the US; unemployment falls in Western Europe: Economic wrap

A slowdown in economic growth in the US; unemployment falls in Western Europe: Economic wrap

Economic growth in the US slowed to an annualized 2 percent in the third quarter of 2021, dropping from the 6.7 percent expansion it experienced in the second quarter, an advance estimate by the country’s Bureau of Economic Analysis showed. 

This is the lowest rate since the second quarter of 2020 when the economy suffered a historic contraction.

Consumer spending faced a setback due to shortfalls in some commodities as a rise in Covid-19 infections meant that the global supply chain underwent disruptions.

US jobless claims

Initial unemployment claims in the United States declined to 288,000 in the week ending 23 October, data released by the US Department of Labor showed. This is fewer than last week’s figure of 291,000 claims and is the lowest level since 14 March 2020.

The advance seasonally adjusted insured unemployment rate stood at 1.7 percent for the week ending 16 October, falling by 0.1 percent from the previous week’s level. This rate measures the percentage of the number of people receiving unemployment insurance.

Unemployment in Western Europe

The German unemployment rate tapered off slightly in September, falling to 3.2 percent down from 3.3 percent in the previous month, Germany's Federal Statistics Office said. However, the seasonally adjusted unemployment rate remained unchanged at 3.4 percent.

Meanwhile, Spain’s unemployment rate declined to 14.57 percent in this year’s third quarter, falling from 15.26 percent in the previous quarter, official data revealed. 

Japan's interest rates on hold

Japan’s central bank kept its rates unchanged for the short-term interest rate and 10-year government bond yields at -0.1 percent and around 0 percent respectively during its October meeting. 

The bank also cut its forecast for the rate of GDP growth for the current financial year to 3.4 percent down from July’s expectation of 3.8 percent.

Weak consumption and a slowdown in exports were mainly responsible for the downward revision.

As for 2022, the economic growth rate forecast was favorably altered to 2.9 percent compared to the previous 2.7 percent as vaccination rollouts gain momentum.

In addition, the bank slashed its consumer inflation estimate for the year ending March 2022 to zero compared to an earlier prediction of 0.6 percent, due to the impact of cellphone fee reductions and the change in the price index’s base year.

Looking at next year, the consumer inflation forecasts were the same at 0.9 percent.

Moreover, Japanese retail sales slipped by 0.6 percent year-on-year in September, compared to the previous month's much steeper fall of 3.2 percent. 

Spain’s inflation

Spain's annual inflation rate likely rose to 5.5 percent in October, according to a preliminary estimate by Spain's National Statistics Institute. This is a noticeable rise from the previous month’s 4 percent.

This is the biggest jump in consumer prices since September 1992 and was driven by soaring energy prices.

The annual core inflation rate, which excludes changes in volatile items, is also expected to reach a record 1.4 percent in October up from 1 percent in the previous month, a preliminary estimate showed.

In addition, consumer prices are predicted to rise 2 percent month-on-month, the highest since January 1986, after a 0.8 percent increase in September.

Brazil’s interest rate decision

For the sixth time this year, Brazil's central bank raised its interest rate by 150 basis points to reach 7.75 percent. At the start of the year, the interest rate in the country was just 2 percent.

This comes at a time when the country is grappling with double-digit inflation rates. The annual inflation rate for the country reached 10.3 percent in September. This is the second highest inflation rate among G20 countries, behind only Argentina.

Italy’s manufacturing and consumer confidence 

Italy's National Institute of Statistics (ISTAT) said that the manufacturing confidence index rose to 114.9 points in October compared to 113.2 points in September. Outlook for orders and future production improved while expectations for inventory levels were more pessimistic.

Additionally, the consumer confidence index went down by 1.2 points in October to 118.4, down from 119.6 in the previous month.


UK hosting Africa investment summit for green transition

UK hosting Africa investment summit for green transition
Updated 20 January 2022

UK hosting Africa investment summit for green transition

UK hosting Africa investment summit for green transition
  • The conference aims to unlock millions of pounds of new investment, especially in clean energy industries in the UK and Africa
  • Britain will launch a digital tool to link African and British businesses to the UK government

LONDON: The UK is hosting an investment conference on Thursday to boost sustainable economic cooperation with African countries and to support the continent’s transition to clean growth.
UK Prime Minister Boris Johnson will open the one-day event, which will be attended by UK and African ministers, business leaders and and heads of international organizations.
The conference, in its second edition, aims to unlock millions of pounds of new investment, especially in clean energy industries in the UK and Africa.
“Two years on from the inaugural UK-Africa Investment Summit, the UK’s ambition to be Africa’s investment partner of choice has never been stronger,” said Secretary of State for International Trade Anne-Marie Trevelyan.
“This year’s conference focuses on the importance of resilient, sustainable investment to support Africa as it pivots toward a more environmentally friendly growth trajectory, and I look forward to working with leaders from the continent as they continue on this path to a greener future,” she added.
During the conference, the UK will launch a new Growth Gateway — a digital tool to link African and British businesses to UK government trade, finance, investment services and opportunities.
UK Export Finance — Britain’s export credit agency — has significantly increased support for markets in Africa in the past year from about £600 million ($817 million) in 2018-19 to more than £2.3 billion in 2020-21, supporting a range of infrastructure projects in countries from Cote d’Ivoire to Uganda, the Department for International Trade said.
Minister for Africa Vicky Ford said that the UK is “deepening its economic ties with African nations” and “there is a lot more that can be done,” adding: “Growth Gateway will make it easier than ever for African and British businesses to access the support they need to boost two-way trade and investment.”
This year’s conference also comes after Britain hosted the UN Climate Change Conference, COP26. The country is looking to build on its commitment to providing £11.6 billion of its International Climate Finance program to help developing countries tackle climate change over the next five years.
Last year’s virtual conference was attended by more than 2,800 delegates from over 40 African countries. Across the UK, 27 trade and investment deals worth £6.5 billion were announced, on top of further commitments worth £8.9 billion.


Turkey Dream Games triples in valuation after raising $255m in funding

Turkey Dream Games triples in valuation after raising $255m in funding
Updated 19 January 2022

Turkey Dream Games triples in valuation after raising $255m in funding

Turkey Dream Games triples in valuation after raising $255m in funding
  • Turkish mobile gaming start-up Dream Games raised an unprecedented $255 million in its latest Series C funding round

RIYADH: Turkish mobile gaming start-up Dream Games raised an unprecedented $255 million in its latest Series C funding round, almost tripling its valuation to $2.75 billion in six months, MAGNiTT reported.

This round of funding was led by Index Ventures, subscribed by returning investors such as Makers Fund, IVP, Kora, Balderton Capital and managed by BlackRock.

The company plans to use the funds for doubling its headcount to 200 people and launch a new game this year.

Founded in 2019, Istanbul-based Dream Games is a mobile gaming company that developed Royal Match — one of the highest grossing mobile games.


UAE, Saudi Arabia, Qatar top competitive economies in the Arab World: AMF

UAE, Saudi Arabia, Qatar top competitive economies in the Arab World: AMF
Updated 19 January 2022

UAE, Saudi Arabia, Qatar top competitive economies in the Arab World: AMF

UAE, Saudi Arabia, Qatar top competitive economies in the Arab World: AMF
  • The United Arab Emirates, Saudi Arabia, and Qatar were ranked the most competitive Arab economies

RIYADH: The United Arab Emirates, Saudi Arabia, and Qatar were ranked the most competitive Arab economies for the period between 2017 until 2020, according to a report launched by the Arab Monetary Fund.

The fifth Arab economies competitiveness report showed that the UAE maintained its top ranking in the general index as it benefited from high scores in the business environment and infrastructure category as well as the organizational and government governance category.

The Kingdom ranked second after having performed well in the overall economic index, the external activities sector and the official reserves index.

Qatar followed in third place, after attaining first place in the real economy sector, the inflation index and GDP per capita index.

Four Arab nations advanced in terms of competitiveness compared to the previous period, including Sudan, Egypt, Morocco, and Mauritania.

Arab states and other non-Arab countries — such as Singapore, Malaysia, Turkey — are included also in the calculation of the index.

The report monitors the economic competitiveness of Arab countries and sheds light on the economic and political measures applied by decision makers for that purpose.


TRSDC closes financing for $3.76bn loan from four Saudi banks

TRSDC closes financing for $3.76bn loan from four Saudi banks
Updated 19 January 2022

TRSDC closes financing for $3.76bn loan from four Saudi banks

TRSDC closes financing for $3.76bn loan from four Saudi banks

RIYADH: Saudi Arabia's The Red Sea Development Co., or TRSDC, announced the financial closure of a SR14.12 billion ($3.76 billion) loan with four Saudi banks.

The financing will be in a form of a term loan facility and a revolving credit facility.

TRSDC, which is developing the world's largest sustainable tourism project, has obtained the loan from Saudi National Bank, Riyad Bank, Banque Saudi Fransi, and Saudi British Bank, according to a statement.

“This year, we have proceeded at pace with the delivery of our flagship project, all the while mindful of our commitment to not only reduce our impact on the environment but actively deliver a 30 percent net conservation benefit by 2040,” explained John Pagano, chief executive officer of The Red Sea Development Company.

GFC Media Group have recently awarded TRSDC’s Green Financing as Project Finance Deal of Year in the Capital Markets Saudi Arabia Awards.


Egypt achieves a $204m initial budget surplus in six months 

Egypt achieves a $204m initial budget surplus in six months 
Updated 19 January 2022

Egypt achieves a $204m initial budget surplus in six months 

Egypt achieves a $204m initial budget surplus in six months 

RIYADH: Egypt’s general budget achieved an initial surplus of 3.2 billion Egyptian pounds ($204 million) during the first six months of the 2021/22 fiscal year, the minister of finance said. 

Mohamed Maait added that revenues grew by 10.3 percent on an annual basis during that period, while tax revenues increased by 15.7 percent, the Middle East News Agency reported. 

He also said that Egypt targets a budget deficit of 6.6 percent in the 2021/22 fiscal year and a primary surplus of 1.5 percent of gross domestic product. 

The minister’s comments came during the cabinet meeting held on Wednesday by the prime minister Mostafa Madbouly, to review the financial performance indicators during the six months period.