Economic sentiment in the EU drops slightly; inflation on the rise in Germany and Spain: Economic wrap

Economic sentiment in the EU drops slightly; inflation on the rise in Germany and Spain: Economic wrap
A row of shops in Valencia, Spain (Getty)
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Updated 29 November 2021

Economic sentiment in the EU drops slightly; inflation on the rise in Germany and Spain: Economic wrap

Economic sentiment in the EU drops slightly; inflation on the rise in Germany and Spain: Economic wrap

The EU’s Economic Sentiment Indicator slipped marginally by 1.1 points to reach 116.5 in November, the European Commission said.

The drop was attributed to a noticeable fall in consumer confidence, although among other sectors such as industry and services it remained the same. At the same time, confidence in the retail trade and construction sectors improved.

Germany, the Netherlands and Spain were among the countries that experienced a downward trend in their economic sentiment, with the latter undergoing the largest decline.

On the other hand, France had the biggest improvement in economic sentiment during the month. Italy and Poland were another two countries that had more favorable sentiment.

Inflation in Western Europe

Annual inflation rate in Spain reached 5.6 percent in November, according to preliminary estimates in a press release issued by Spain's National Statistics Institute. 

The inflation rate predicted for November will be the highest since September 1992. The increase was mainly driven by higher food prices.

In addition, the monthly inflation rate is expected to reach 0.4 percent in November.  

Meanwhile, Germany’s consumer prices are expected to rise in November by 5.2 percent from a year ago, data from Germany’s Federal Statistics Office showed. This is higher than October's 4.5 percent.

Energy costs surged by 22.1 percent while food prices went up by 4.5 percent, according to preliminary estimates.

The monthly inflation rate is expected to be a negative 0.2 percent in November.

Mexico’s unemployment

The Mexican jobless rate decelerated to 3.9 percent in October from 4.2 percent in the prior month, according to the country’s official statistics agency, INEGI.

The number of unemployed persons eased to 2.3 million, declining by 288,000 from a year earlier, the INEGI report showed.

On a seasonally adjusted basis, the jobless rate remained at 3.9 percent.


Pakistan raises $1bn, offers highest-ever rate for a sukuk of 7.95 percent

Pakistan raises $1bn, offers highest-ever rate for a sukuk of 7.95 percent
Image: Shutterstock
Updated 8 sec ago

Pakistan raises $1bn, offers highest-ever rate for a sukuk of 7.95 percent

Pakistan raises $1bn, offers highest-ever rate for a sukuk of 7.95 percent
  • The issuance comes at a time when Pakistan’s gross foreign reserves have fallen to nearly $17 billion

Pakistan has raised $1 billion with a 7-year sukuk, offering an interest rate of 7.95 percent, the highest return the South Asian nation has ever paid on an Islamic bond, a finance ministry official said on Tuesday.


The issuance comes at a time when Pakistan’s gross foreign reserves have fallen to nearly $17 billion from $19 billion in the past two weeks due to debt repayments.


Ministry spokesman Muzammil Aslam said international debt markets worldwide had suffered shocks since December due to expected increases in interest rates in the United States and Europe.


“So given the situation, we have got the good deal in this uncertain time,” he told Reuters.


Pakistan sees foreign funds inflows as critical given that its external account deficit has widened on back of soaring global commodity prices — in particular oil, which makes up about a third of the country’s payments.


Foreign exchange reserves are also a key buffer to stabilize the rupee. Pakistan only last year adopted a market-based exchange rate, resulting in a sharp depreciation of the rupee.


An IMF review board is meeting on Jan. 29 to approve a $1 billion tranche of a $6 billion loan signed with Pakistan in 2019.


The last sukuk Pakistan issued was a five-year sukuk in 2017 at a rate of 5.6 percent.


A healthier global economy is set to push oil demand to an all-time high: Jadwa

A healthier global economy is set to push oil demand to an all-time high: Jadwa
Updated 23 min 40 sec ago

A healthier global economy is set to push oil demand to an all-time high: Jadwa

A healthier global economy is set to push oil demand to an all-time high: Jadwa

Driven by a stronger global economy, higher mobility and loosened restrictions, oil demand is expected to hit an all-time high of 100.8 million barrels per day, according to a Saudi investment bank.

Jadwa Investment said that demand will be 4 percent higher in 2022 when compared to the previous year.

However, the omicron outbreak could induce a setback in demand for the first quarter of 2022, before going up in the following three quarters.

The investment firm pointed out that the traditional centers of oil demand — such as the US, China, other Asia and India — will account for 62 percent of the growth in demand this year.

One issue Jadwa mentioned was the inability of some OPEC+ members to meet their production targets. In the final quarter of 2021, the alliance raised its production by 240,000 barrels per day, noticeably below the expected average of 800,000 barrels per day.

As for oil prices, the Riyadh-based firm increased its 2022 Brent oil price forecasts to $76 per barrel, up from a previous estimate of $71 a barrel. 

The rise in the projection was attributed to shortfalls in OPEC+ spare capacity and drops in commercial oil activity.


Saudi Arabia, Iraq sign electrical interconnection agreement 

Saudi Arabia, Iraq sign electrical interconnection agreement 
Updated 4 min 14 sec ago

Saudi Arabia, Iraq sign electrical interconnection agreement 

Saudi Arabia, Iraq sign electrical interconnection agreement 

Saudi Arabia and Iraq signed an electrical interconnection agreement on Tuesday at the Saudi-Iraqi Forum.

Hamid Al-Ghazi, the  Secretary-General of Iraq's Council of Ministers, set out the need for the deal, saying: "Iraq is in dire need of electricity, and this connection will add to the Iraqi electric power."

The Memorandum of Understandng came as a result of a study conducted by the two countries, which concluded that there is an opportunity to connect them in what is a step towards achieving a regional market for electricity sharing.

Saudi Energy Minister Prince Ablduaziz bin Salman said: “Recently, Saudi Arabia and Jordan signed a MoU of electrical interconnection between both countries, and then a few months ago we signed an agreement in the same regard with Egypt."

“Today comes the agreement with Iraq, which is part of a goal to make the Kingdom a regional center for linking electricity systems in the Arab world,” he added.

 

 


mCloud, Aramco to explore a joint hub for ESG solutions in Saudi Arabia

mCloud, Aramco to explore a joint hub for ESG solutions in Saudi Arabia
Updated 35 min 47 sec ago

mCloud, Aramco to explore a joint hub for ESG solutions in Saudi Arabia

mCloud, Aramco to explore a joint hub for ESG solutions in Saudi Arabia

SAN FRANCISCO: mCloud Technologies Corp., a leading provider of AI-powered asset management and Environmental, Social, and Governance solutions, signed a Memorandum of Understanding with Aramco, according to a statement from mCloud.

Under the MoU, mCloud will explore with Aramco the co-development of a digital technology hub for delivering ESG solutions in Saudi Arabia.

This hub would enable both parties to jointly develop new AI-powered innovations to facilitate the carbon reduction of complex energy-intensive assets throughout the Kingdom and abroad, the statement added.

The company plans to develop a center of excellence that will serve as a home base for a dedicated team of ESG and digital transformation experts based in Saudi Arabia, it added.


Turkish manufacturers stop production amid limited gas supply: NRG matters

Turkish manufacturers stop production amid limited gas supply: NRG matters
Updated 57 min 25 sec ago

Turkish manufacturers stop production amid limited gas supply: NRG matters

Turkish manufacturers stop production amid limited gas supply: NRG matters

RIYADH: From the US to Europe to Asia, instability in the energy sector prevails as prices continue to soar, delays take place, proposals jeopardize green goals, and gas flows come to a halt. However, countries including Indonesia seem to be keeping their green push on track with major investments on the way.

Looking at the bigger picture:

  • European power prices are soaring as mild weather reduces wind turbine output, Bloomberg reported. The surge in prices is further deepened by the political turbulence caused by Russia’s movements on Ukraine’s border which could jeopardize the continent’s energy supply.
  • Around 300 renewable power firms are appealing to congress leaders in the US to speed up the signing off of climate projects which are part of President Biden’s tax and spending plan. This comes as projections indicate that each month of delay leads to a loss of an estimated $2 billion of economic activity.
  • The EU has been criticized by The Platform on Sustainable Finance for its plan to label nuclear energy and natural gas projects as green and sustainable, Bloomberg reported. This comes as the plan is expected to threaten the continent’s net zero goals, diminishing the EU’s credibility when it comes to environmentally-friendly policies.
  • Several Turkish manufacturers have temporarily stopped production after neighboring Iran cut gas flows into the country for as much as 10 days due to technical issues in a local station, Reuters reported.
  • Indonesia is to establish a $4 billion worth polysilicon industry to boost solar panel production, Bloomberg reported. This comes as the Asian country aims to drift away from fossil fuels and shift its dependability on green energy.

Through a micro lens:

  • UK multinational oil and gas firm Shell’s carbon capture plant located in Canada, better known as The Quest, is responsible for releasing more greenhouse gases than it captures, according to an investigation by UK human rights organization Global Witness  The group claims that while the carbon capture facility has averted 5 million tons of carbon dioxide from breaking free into the atmosphere since 2015, it has emitted 7.5 million tons of greenhouse gases in return during the same period. A spokesman for Shell claimed that the analysis is “simply wrong,” CNBC reported.