S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

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Updated 05 April 2022

S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

RIYADH: South Korea’s consumer prices rose at their fastest pace in more than a decade in March as the Ukraine war fueled surging energy and commodity costs, adding pressure to the central bank ahead of its rate decision meeting next week.

The consumer price index for March rose 4.1 percent from a year earlier, official data showed on Tuesday, the fastest increase since December 2011 and outpacing a 3.8 percent rise tipped in a Reuters poll. 

Core inflation, which excludes volatile food and energy costs, also jumped 2.9 percent from a year earlier, staying at the rate seen in February. The sustained rise in core prices shows surging fuel and raw materials costs are feeding through to consumers.

Japan’s household spending

Japan’s household spending rose for a second consecutive month year-on-year in February, helped by a flattering comparison with last year’s sharp pandemic-induced slump but the consumer sector is now facing growing headwinds from soaring prices.

Households cut spending from the previous month as pandemic curbs, rapid food and fuel price rises and the coronavirus kept wallets shut, casting a shadow over the world’s third-largest economy.

In a sign of trouble for consumer sentiment, real wage growth stagnated in February as global inflationary pressures weighed on household purchasing power.

“Prices will outpace wage gains from now on, so consumption will be on a sluggish trend,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Romania lifts interest rate 

Romania’s central bank lifted its benchmark interest rate by half a percentage point to 3 percent on Tuesday and said inflation would rise more than expected as fuel and food prices would outpace a government energy support scheme.

The bank raised its lending facility rate to 4 percent from 3.50 percent and its deposit rate to 2 percent from 1.5 percent, and said it would retain firm control over market liquidity.

All analysts polled by Reuters had expected Tuesday’s hike, with a median forecast for the benchmark rate at end-2022 at 4 percent.

Australia’s hike interest rate

Australia’s central bank on Tuesday opened the door to the first interest rate increase in more than a decade as it dropped a previous pledge to be “patient” on policy, a major surprise that sent the local dollar to nine-month highs.

Wrapping up its April policy meeting, the Reserve Bank of Australia kept its cash rate at 0.1 percent but noted inflation had picked up and was likely to rise further, while unemployment had fallen faster than expected to 4.0 percent.

“Over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labor costs,” said RBA Gov. Philip Lowe in a statement.

Italy’s service sector 

Growth in Italy’s service sector slowed in March as the war in Ukraine weighed on demand, a survey showed on Tuesday, the latest sign of weakening momentum in the eurozone’s third-largest economy.

S&P Global’s Purchasing Managers’ Index Index for services fell to 52.1 in March from 52.8 in February, while remaining above the 50 mark that separates growth from contraction.

The reading beat the median forecast of 51.5 in a Reuters survey of 14 analysts.

The sub-index for new business in the service sector came in at 52.6 in March compared with 52.9 in February.

Growth in France

France’s services sector grew at a faster rate in March, a survey showed on Tuesday, although businesses’ confidence over the outlook weakened due to inflation and uncertainty caused by Russia’s invasion of Ukraine.

S&P Global said that while French business activity had benefited from the removal of COVID-19 health protocols in the country, its measure of business confidence had fallen to a 14-month low in March.

S&P Global said its purchasing managers index for services rose to 57.4 points in March from 55.5 in February — exactly in line with an earlier flash estimate.

Canada’s exports 

Canada’s exports rose 2.8 percent in February to a record high, driven mostly by energy products, while imports climbed 3.9 percent from the previous month, led by metals, data from Statistics Canada showed on Tuesday.

The country’s trade surplus with the world narrowed to C$2.66 billion ($2.14 billion), slightly below analyst forecasts of C$2.9 billion. But exports came in above expectations at C$58.75 billion, with imports also beating at C$56.08 billion.

Energy exports rose 7.8 percent to a record high, making up more than two-thirds of the total increase, while exports of non-energy products were up 1.2 percent. In volume terms, exports were up 0.6 percent.

US trade deficit 

The US trade deficit barely budged from a record high in February, suggesting that trade remained a drag on economic growth in the first quarter.

The Commerce Department said on Tuesday that the trade deficit dipped 0.1 percent to $89.2 billion in February. Data for December was revised to show a $89.2 billion shortfall, still an all-time high, instead of the previously reported $89.7 billion.

Economists polled by Reuters had forecast a $88.5 billion deficit. Trade has subtracted from gross domestic product growth for six straight quarters.


Riyadh tops global cities with fastest millionaire population growth

Riyadh tops global cities with fastest millionaire population growth
Updated 06 October 2022

Riyadh tops global cities with fastest millionaire population growth

Riyadh tops global cities with fastest millionaire population growth

RIYADH: Saudi Arabia’s capital Riyadh has recorded the fastest millionaire population growth globally in the first half of 2022, as the Kingdom’s economic growth progresses in line with the goals outlined in Vision 2030, according to London-based investment migration consultancy Henley & Partners. 

According to the report, the number of millionaires grew by 20 percent in Riyadh in the first half.

In the first half, Riyadh created 1,700 new high-net-worth individuals who have assets worth $1 million, while 850 people are multimillionaires with assets worth $10 million.

In the same period, 47 people became centi-millionaires with assets worth $100 million, while five people turned into billionaires.

According to the World Wealth Report 2022 issued by the Capgemini Research Institute for Financial Services in June, Saudi Arabia has the largest number of millionaires in the Middle East with more than 224,000 millionaires living in the Kingdom.

The report also suggested that Saudi Arabia is ranked 17th globally in the number of millionaires, with the number of high-net-worth individuals rising from 210,000 in 2020 to 224,000 in 2021. Sharjah also topped the list with a 20 percent growth, followed by Zambia's Lusaka and Dubai in the second spot, as both cities registered a growth of 18 percent.

Angola’s Luanda and Abu Dhabi secured the third spot, both cities reporting growth of 16 percent, followed by Nigeria’s Lagos at 15 percent and Austin at 14 percent in the fourth and fifth spots respectively.


Biden says he is surveying options after OPEC+ decision to cut output

Biden says he is surveying options after OPEC+ decision to cut output
Updated 06 October 2022

Biden says he is surveying options after OPEC+ decision to cut output

Biden says he is surveying options after OPEC+ decision to cut output

WASHINGTON/NEW YORK: US President Joe Biden expressed disappointment on Thursday over announced plans by OPEC+ nations to cut oil output and said the US was looking at its alternatives.

OPEC+ agreed to steep oil production cuts on Wednesday, curbing supply in an already tight market and raising the possibility of higher gasoline prices right before the US midterm elections in November, when Biden’s Democrats are defending their control of the House of Representatives and the Senate.

“We’re looking at what alternatives we may have,” Biden told reporters at the White House when asked about the OPEC decision. “There’s a lot of alternatives. We haven’t made up our minds yet,” he said.

“But it is a disappointment,” he added of the OPEC+ decision, and indicates problems.

Prices

Oil prices held at three-week highs on Thursday after OPEC+ decision. Brent crude futures gained 88 cents, or 0.9 percent, to $94.25 per barrel by 11:19 a.m. EDT (1519 GMT) after settling 1.7 percent up in the previous session. US West Texas Intermediate crude futures rose 79 cents, or 0.9 percent, to $88.55 after closing 1.4 percent up on Wednesday.

Separately on Wednesday, Russian Deputy Prime Minister Alexander Novak said Russia could cut oil output in an attempt to offset the effects of price caps imposed by the West over Moscow’s actions in Ukraine. 

A draw in US oil stockpiles last week also supported prices. Crude inventories dropped by 1.4 million barrels to 429.2 million barrels in the week ended Sept. 30, the Energy Information Administration said.


Saudi Arabia’s point-of-sale value rises to $3.4bn as food spending increases: SAMA

Saudi Arabia’s point-of-sale value rises to $3.4bn as food spending increases: SAMA
Updated 06 October 2022

Saudi Arabia’s point-of-sale value rises to $3.4bn as food spending increases: SAMA

Saudi Arabia’s point-of-sale value rises to $3.4bn as food spending increases: SAMA

CAIRO: Food and drink sales helped drive a 23 percent rise in point-of-sale transactions in Saudi Arabia in the week ending Oct. 1, the latest weekly data from the Saudi Central Bank revealed.

Sales grew by SR2.4 billion ($640 billion) last week to reach SR12.8 billion in what was the highest percentage rise since the week ending July 30.

POS is an economic term used to describe what is spent by consumers using their ATMs and credit cards in retail stores, shopping malls, and pharmacies, among others. 

This five-week peak fell just below SR13.5 billion worth of POS transactions recorded in the week ending on Sept. 3, showed the SAMA data. 

This spike was mainly driven by increased spending on food and beverage services, with the sector’s total POS transaction rising by SR681.3 million to reach SR2.1 billion in the week ending on Oct. 1, recording 47.9 percent growth over the previous week.

Of the 17 sectors, 16 saw a rise in the value of POS transactions:

  • Other — Up SR382.3 million; up SR1.2 million previous week
  • Miscellaneous goods and services — Up SR342.9 million; down SR4.9 million last week
  • Health — Up SR219.6 million; down SR7.6 million previous week 
  • Transportation — Up SR164.3 million; down SR30.7 million previous week 
  • Gas stations — Up SR102.3 million; down SR26.1 million last week 

The education sector witnessed the biggest percentage change in the week ending on Oct. 1 in both transaction value and number of transactions. 

The sector’s POS transaction value went up by 115.6 percent to reach SR184 million, while the number of POS transactions went up by 51.9 percent to hit 170,000. 

The only sector that recorded less POS transactions – both in number and value – in that week was the hotels. 

This sector’s POS value dropped by SR23.2 million to reach SR215.9 million, while the number of transactions dropped by 42,000 to reach 562,000 transactions. 

With regards to the number of POS transactions, food and beverages also led the way with an increase of 4.4 million transactions in that week to reach 37.2 million transactions. 

  • Restaurants and cafes — Up 3.7 million; down 0.5 million previous week
  • Miscellaneous goods and services — Up 2.9 million; down 0.9 million previous week
  • Other— Up 2.6 million; down 0.4 million previous week
  • Health — Up 1.6 million; down 0.5 million previous week
  • Gas stations — Up 1 million; down 0.4 million previous week

The city of Riyadh, which records the largest share of POS transactions, saw a 11.4 percent increase in the number of transactions in the week ending Oct. 1, compared to a 3.1 percent fall the week prior. 

The city witnessed a 20.2 percent rise in POS transaction value in the week ending Oct. 1, compared to only 0.3 percent the previous week. 

The Kingdom’s capital recorded a total POS value of SR4 billion, up by SR1 billion from the week before. 

As for the number of POS transactions in Riyadh, it rose by 7.7 million from the previous week, reaching 57.6 million in the week ending on Oct. 1. 

Jeddah followed with SR1.9 billion worth of POS transitions which increased by SR253.8 million in the week ending on Oct. 1.

The number of transactions in the city reached 21.9 million, up 1 million from the week before. 


Saudi GAC approves Al Hilal’s acquisition of Etihadat Abyan assets 

Saudi GAC approves Al Hilal’s acquisition of Etihadat Abyan assets 
Updated 06 October 2022

Saudi GAC approves Al Hilal’s acquisition of Etihadat Abyan assets 

Saudi GAC approves Al Hilal’s acquisition of Etihadat Abyan assets 

RIYADH: Saudi pharmaceutical firm Al Hilal Trading Co. has received the General Authority for Competition’s approval to acquire the assets of Etihadat Abyan Co..

Under the formal approval by the regulator, the acquired assets by Al Hilal Trading Co. include S Team and Mawj Al Hilal brands and the related four stores.

The deal will not significantly affect the sportswear market in the Kingdom, GAC said in a statement according to Argaam on Oct. 6. 

The intended acquisition will be done by transferring the assets to Al Hilal Trading Co., a subsidiary of Al Hilal Club Investment Co.. 

Last August, the Tadawul-listed online food delivery platform Jahez International Co for Information Systems Technology, partnered with Al Hilal Investment to set up an online marketing and sales firm.


MENA total startup funding drops 54% month-on-month: Wamda 

MENA total startup funding drops 54% month-on-month: Wamda 
Updated 06 October 2022

MENA total startup funding drops 54% month-on-month: Wamda 

MENA total startup funding drops 54% month-on-month: Wamda 

RIYADH: Startups in the Middle East and North Africa region raised $173 million across 51 deals in September, marking a 54 percent decrease compared to the month before. 

Saudi Arabia’s logistics startup TruKKer was responsible for the bulk of that funding as it secured a $100 million pre-initial public offering round, according to Wamda.

The Kingdom raised a total of $114 million in startup funding in just six deals, while the UAE had 12 deals with a total of $27 million. 

Aside from Trukker’s fundraise, fintech companies managed to get the highest amount of funding with $28 million followed by food tech startups with $22 million. 

Foreign investment was high in September as US investors participated in 11 deals while UK investors were the second active with seven deals.