Capital Economics sees stronger Gulf non-oil growth in 2022 and 2023

Capital Economics sees stronger Gulf non-oil growth in 2022 and 2023
Capital Economics raised its forecast for Brent crude by 8 percent this year to $70 a barrel. (Shutterstock)
Updated 21 January 2022

Capital Economics sees stronger Gulf non-oil growth in 2022 and 2023

Capital Economics sees stronger Gulf non-oil growth in 2022 and 2023

RIYADH: Higher oil prices will support looser Gulf fiscal spending for the next two years, with a knock-on effect on non-oil growth in the region, according to Capital Economics.

The economic consultancy updated its oil-price forecasts this week, predicting Brent crude will end 2022 at $70 a barrel and 2023 at $65 a barrel, up from previous forecasts of $60 and $55, respectively. The change was driven by the expectation that Russia and some smaller producers within OPEC+, the alliance of the Organization of Petroleum Exporting Countries and other producers, will struggle to meet their production quotas.

That led to an upgrade in Gulf hydrocarbon export revenue prediction of 8 percent and 11 percent for this year and next, respectively, Capital Economics Middle East and North Africa Economist James Swanston wrote in a research note.

“The upshot is that higher oil prices will keep the door for fiscal loosening ajar for longer, which may provide scope for slightly stronger growth in non-oil sectors,” he wrote. “But, as prices head below $70pb in 2023, that door will gradually close.”

For Middle East economies outside the Gulf, continued high oil prices will mean current-account deficits stay wider for longer, the note said. For countries that haven’t scaled back fuel subsidies, fiscal budgets will also remain under pressure.

“This furthers cement our view that, with officials struggling to push through fiscal consolidation, Tunisia will continue along the past to a sovereign default,” Swanston said.


Six Saudi women make list of Arab world’s most inspirational business leaders

Princess Lamia Bint Majed Al-Saud
Princess Lamia Bint Majed Al-Saud
Updated 27 min 3 sec ago

Six Saudi women make list of Arab world’s most inspirational business leaders

Princess Lamia Bint Majed Al-Saud
  • Princess Lamia Bint Majed Al-Saud among 50 recognized by Arabian Business magazine

LONDON: Six trailblazing Saudis have been named among Arabian Business magazine’s 50 most inspirational businesswomen.

The list, published last week, recognizes women who have used their influence, experience and ambition to make a mark in the region.

All of the Saudi women honored have made a significant contribution to the Kingdom’s evolving landscape, in fields as diverse as architecture and philanthropy.

Among them was Princess Lamia Bint Majed Al-Saud, the secretary general and member of the board of trustees at Alwaleed Philanthropies, who is regarded as a pioneer of women’s empowerment in Saudi Arabia.

Winner of the Achievement in Philanthropy prize at the Arab Woman of the Year Awards in 2017, the princess launched her own publishing company in 2003, which now produces three magazines from Dubai, Cairo and Beirut.

Given that female empowerment in the Kingdom is an integral part of Saudi Vision 2030, it was no surprise to see Mae Al-Mozaini, founder and CEO of The Arab Institute for Women’s Empowerment, on this year’s Arabian Business list.

Al-Mozaini is also the founder of Nusf, a social enterprise dedicated to helping advance the economic and social well-being of women across the Arab world.

Ghada Othman Alrumayan, group chief marketing and communications officer at ROSHN, was another inspiring business leader to make the list.

A national community developer and Public Investment Fund project, ROSHN is responsible for implementing one of the largest residential real estate projects in the Kingdom.

The three other Saudi women to be recognized were Mona Althagafi, Rabaa Abdulaziz Al-Othaim and Rasha Al-Hoshan.

As country director for Saudi Arabia at Serco, Althagafi is responsible for steering the British company’s growth in the Kingdom. With more than 20 years’ experience, she has held various positions within government and the private sector.

Engineer and founder of 4A Architects, Al-Othaim was recognized for her outstanding work in the Kingdom’s health, hospitality, residential and commercial sectors.

Owner and founder of interior design company Rasha Al-Hoshan Est, Al-Hoshan holds degrees in interior design and architecture from some of the world’s top universities. She is also responsible for introducing leading furniture brands like Nada Debs, Fendi Casa and B&B Italia to the Saudi market.


Sri Lanka PM warns of looming food crisis

Men wait with their carts at a market, amid the country's economic crisis in Colombo, Sri Lanka. (REUTERS)
Men wait with their carts at a market, amid the country's economic crisis in Colombo, Sri Lanka. (REUTERS)
Updated 21 May 2022

Sri Lanka PM warns of looming food crisis

Men wait with their carts at a market, amid the country's economic crisis in Colombo, Sri Lanka. (REUTERS)
  • Last year’s ban on chemical fertilizer has affected rice production in the country
  • Island nation unable to pay for essential imports as it faces worst financial slump in decades

COLOMBO: Sri Lanka’s prime minister warned on Friday of looming food shortages, with the country unable to secure fertilizer for rice cultivation amid a devastating economic crisis.

The island nation of 22 million people is facing acute shortages not only of food, but also medicines and fuel, as its budget deficit climbs to $6.8 billion, or 13 percent of gross domestic product, leaving essential imports out of reach.

Denial of food security in the country cannot be taken by the common man, and it can lead to a severe uprising.

Dayan Jayatillake, Former ambassador

Many in Sri Lanka can hardly afford three meals a day, with the price of some essential food items, such as rice, having risen by 300 percent since the beginning of the year, according to the central bank’s estimates from April.

The country has already defaulted on its debts after missing a deadline for foreign debt repayments on Wednesday. The following day, it ran out of petrol, with no money coming and fuel ships remaining anchored offshore.

A man celebrates as a truck carrying domestic cooking gas cylinders arrives for distribution in Colombo on Friday amid Sri Lanka’s economic crisis. (Reuters)

Prime Minister Ranil Wickremesinghe, who took office after his predecessor resigned last week, said the looming food crisis was due to a lack of fertilizer for agricultural production.

“From August there is the possibility of a food crisis in Sri Lanka,” he said in a statement, adding that it remains to be seen how the county will survive.

“As Sri Lanka has not had fertilizer for cultivation, the coming rice cultivation season will not have the full production.”

A decision in April last year by President Gotabaya Rajapaksa to ban all chemical fertilizer has led to a fall in crop yields. Although the ban was lifted a few months later, no substantial imports have taken place.

The situation is compounded by the war in Ukraine, a leading global exporter of grain.

“The shortage of food in the country is likely not only because of the local production but also due to the scarcity of imports, which were affected by the Ukrainian war,” Prof. Palitha Weerakkody, from the Department of Crop Science of the University of Peradeniya, told Arab News.

“Rice is the staple food here and there will be around 30 percent reduction in its harvest in July since the farmers have not got their imported inputs to boost their cultivation.”

Dayan Jayatillake, Sri Lanka’s former envoy to the UN in Geneva, said the anticipated food crisis will be the “greatest tragedy in the annals of Sri Lanka.”

Jayatillake told Arab News: “The ban on chemical fertilizers has jeopardized not only the paddy cultivation but also our tea plantation, which is our cash crop. Our dollar income from the export of tea is also dwindling.”

He said:  “Denial of food security in the country cannot be taken by the common man, and it can lead to a severe uprising.”

Sri Lanka’s devastating economic crisis — the worst since independence in 1948 — has triggered widespread demonstrations across the country since March, with protesters demanding the resignation of Rajapaksa and his family, whom they blame for the worsening situation.

Mahinda Rajapaksa, the president’s elder brother, quit as prime minister on May 9, after clashes between government supporters and protesters left nine people dead and almost 300 injured.

 


International Muslim History Month returns to shed light on pioneers and sees quadrupled participation

(Twitter: @muslimhistorym)
(Twitter: @muslimhistorym)
Updated 21 May 2022

International Muslim History Month returns to shed light on pioneers and sees quadrupled participation

(Twitter: @muslimhistorym)
  • The organization told Arab News that the event, which is geared toward schools, universities, workplaces, businesses, organizations, and social settings, is a celebration for everyone, irrespective of ethnicity or religious backgrounds

LONDON: An annual initiative that celebrates Muslim accomplishments throughout history and confronts Islamophobia globally through education has grown significantly in popularity, with social media engagement quadrupling in just a year, organizers said.

International Muslim History Month, which was established by the New York-based World Hijab Day organization in 2021 and runs throughout May, aims to acknowledge and raise awareness of the Muslim trailblazers who helped to shape humanity.

The organization told Arab News that the event, which is geared toward schools, universities, workplaces, businesses, organizations, and social settings, is a celebration for everyone, irrespective of ethnicity or religious backgrounds.

BACKGROUND

International Muslim History Month, which was established by the New York-based World Hijab Day organization in 2021 and runs throughout May, aims to acknowledge and raise awareness of the Muslim trailblazers who helped to shape humanity.

More than 26 countries participated in the inaugural IMHM 12 months ago but this year the number has increased significantly, WHD said, with more individuals, organizations, businesses, and educational institutions taking part.

“In addition, we have seen a rise in awareness of IMHM on social media by individuals and academics, (and) our reach on social media has quadrupled from last year,” it added.

The organization — which founded World Hijab Day, held on Feb. 1 each year to spread awareness of the hijab and why it is worn — said its goal was for IMHM to be federally recognized nationwide within the US, and internationally, to help tackle Islamophobia worldwide.

New York adopted a resolution to recognize the month on May 4, 2021, “to pay tribute to those who foster ethnic pride and enhance the profile of cultural diversity which strengthens the fabrics of the communities of the New York State,” Andrew Cuomo, the governor at the time, said.

WHD has been calling on legislators worldwide to do the same. It is also urging individuals, organizations, and educational institutions to get involved and help raise awareness of the campaign.

The ways in which Muslims and non-Muslims can participate include social media engagement, petitioning government officials to recognize May as International Muslim History Month, supporting a Muslim business or donating to a Muslim organization, reading a biography of an influential Muslim figure and sharing their story, or calling out discrimination and prejudice against Muslims within their community.

The theme of this year’s event focuses on Muslim pioneers from the Golden Age to modern times in four categories: medicine; STEM (science, technology, engineering and mathematics); liberal arts; and discovery, including inventors, explorers, and innovators. Conferences have been organized each week to raise awareness of significant figures in these fields.

“In the first conference, the presenters discussed the examples of Ibn Sina, the father of early modern medicine, from the Golden Age, to Dr. Ugur Sahin and Dr. Ozlem Tureci, the creators of BioNTech, a company focused on making personalized cancer vaccines,” WHD said. In partnership with Pfizer, BioNTech also developed a vaccine for COVID-19.

Other notable Muslims that were highlighted this year include 13th-century Persian poet Rumi, sixth-century Arab poet Imru’ Al-Qais, Pakistani-American neurosurgeon Dr. Ayub Ommaya, Palestinian-Jordanian molecular biologist Dr. Rana Dajani, Arab philosopher Ibn Khaldun, Moroccan explorer Ibn Battuta, Caliph Harun Al-Rashid, Turkish astronomer Burcin Mutlu-Pakdil, among dozens of others.

WHD has also partnered with different organizations including Majlis Ash-Shoura: Islamic Leadership Council of New York, an umbrella organization that represents more than 90 mosques and organizations.

“In the last two decades, Muslims in general have been painted negatively especially in the media,” the organization’s founder and chief executive officer, Nazma Khan, said.

Growing up in New York, she pointed out that her driving factor had been noticing the “minimal to no inclusion of Muslim-Islamic history across the general school curriculum.”


Dual impact from oil and non-oil sectors ‘to propel Saudi GDP growth by 10 percent’

Dual impact from oil and non-oil sectors ‘to propel Saudi GDP growth by 10 percent’
Updated 21 May 2022

Dual impact from oil and non-oil sectors ‘to propel Saudi GDP growth by 10 percent’

Dual impact from oil and non-oil sectors ‘to propel Saudi GDP growth by 10 percent’
  • Capital Economics says it will be the highest annual growth rate in over a decade, if this happens

RIYADH: Saudi Arabia’s gross domestic product is expected to grow by 10 percent this year, driven by increased activities in the oil and non-oil sectors, according to a recent note from Capital Economics.

The London-based independent research firm said it will be the highest annual growth rate in over a decade, if this happens.

Capital Economics expects the Kingdom to achieve the projected 10-percent growth due to a  significant increase in oil output combined with an expected loosening of fiscal policy that is set to encourage growth in the non-oil sector.

This projection follows the flash estimate for the first quarter GDP released earlier this month which showed the economy grew 2.2 percent since the last quarter of 2021, and 9.6 percent year-on-year — the highest growth rate in 11 years.

In regards to performance on a quarter-on-quarter basis, the growth is attributed to a 2.9 percent rise in oil GDP due to increased output on the back of the OPEC+ deal and a 2.5 percent growth in non-oil activities.

The increase in energy prices, which has been the largest since the 1973 oil crisis, together with the war in Ukraine — which altered the global patterns on trade, production and consumption — have contributed to this record GDP growth.

SPEEDREAD

The projection by London-based Capital Economicsfollows the flash estimate for the first quarter GDP released earlier this month which showed the economy grew 2.2 percent since the last quarter of 2021, and 9.6 percent year-on-year — the highest growth rate in 11 years.

Though Saudi Arabia still hasn’t met its OPEC+ quota, it is one of the few members raising produc- tion significantly. With other member countries struggling to meet their quotas and an expected decline in Russian output, Capital Economics predicts the Kingdom will increase oil production faster than anticipated under the current OPEC+ agreement.

According to the World Bank, energy prices are expected to rise more than 50 percent in 2022, before easing in 2023 and 2024.

As oil prices remain elevated, policymakers are expected to relax fiscal policy to stimulate non-oil activities, with a reduction in the value-added tax a possibility, the note from Capital Economics pointed out.

The Kingdom’s non-oil sector has also expanded at the fastest rate in over four years, according to the Saudi Arabia PMI survey.

This has been due to new business and activity that boosted sharply as client demand recov- ered after COVID-19.

The increase in business also came in line with Vision 2030, a reform plan that aims to diversify the country’s economic resources.

The 10 percent figure projected by Capital Economics is much higher than recent projections from the IMF, which predicted the Saudi economy to grow by 7.6 percent in 2022, as mentioned in its World Economic Outlook released in April 2022. 


Syria intercepts Israeli missile attack: state media

Israeli F35 I fighter jets take part in an air defence exercise in Eilat. (AFP file photo)
Israeli F35 I fighter jets take part in an air defence exercise in Eilat. (AFP file photo)
Updated 21 May 2022

Syria intercepts Israeli missile attack: state media

Israeli F35 I fighter jets take part in an air defence exercise in Eilat. (AFP file photo)
  • Since civil war broke out in Syria in 2011, Israel has carried out hundreds of air strikes there, targeting government positions as well as bases and weapon depots for allied Iran-backed forces and fighters of Lebanon’s Shiite militant group Hezbollah

DAMASCUS: Syrian air defenses intercepted Israeli missile strikes near Damascus, state media reported on Friday.
“Our air defenses stopped a number of hostile missiles in the airspace of the southern countryside of Damascus,” Syria’s official news agency SANA said.
AFP correspondents in the Syrian capital said they heard very loud noises in the evening.
The Syrian Observatory for Human Rights war monitor said that the target of the Israeli strikes were Iranian bases near Damascus.
The latest strike follows one on May 14 that killed five soldiers and another one on April 27 which, according to the Observatory, killed 10 combatants, among them six Syrian soldiers, in the deadliest such raid since the start of 2022.
Since civil war broke out in Syria in 2011, Israel has carried out hundreds of air strikes there, targeting government positions as well as bases and weapon depots for allied Iran-backed forces and fighters of Lebanon’s Shiite militant group Hezbollah.
While Israel rarely comments on individual strikes, it has acknowledged mounting hundreds of them.
The Israeli military has defended them as necessary to prevent its arch-foe Iran from gaining a foothold on its doorstep.
The conflict in Syria has killed nearly half a million people and forced around half of the country’s pre-war population from their homes.