World events behind price spikes, says Saudi minister of commerce

Saudi Minister of Commerce Majid Al-Qasabi. (Supplied)
Saudi Minister of Commerce Majid Al-Qasabi. (Supplied)
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Updated 06 July 2022

World events behind price spikes, says Saudi minister of commerce

Saudi Minister of Commerce Majid Al-Qasabi. (Supplied)
  • After 13 months — specifically March 2021 — there were growing signs of economic recovery, Al-Qasabi said, but warning that there was an increase in demand versus supply

JEDDAH: Major events including the COVID-19 pandemic and war in Ukraine have caused price hikes around the world, Saudi Minister of Commerce Majid Al-Qasabi said in a periodic government communication conference on Tuesday.

The press conference discussed four key areas: Global events that led to price increases, the Saudi leadership’s guidance to address the effects of the hikes, repercussions of global events on prices, as well as a question and answer segment.

“Let us rewind two years and a half back to February 2020. The COVID-19 pandemic was an economic, social and mental tsunami. It was the biggest economic crisis in the world,” Al-Qasabi said.

“This pandemic affected the whole world all at once, and suddenly without any warning. We are still suffering from its effects,” he added.

“We stayed in the pandemic for 13 months, and after that, it was the beginning of recovery.”

After 13 months — specifically March 2021 — there were growing signs of economic recovery, Al-Qasabi said, but warning that there was an increase in demand versus supply.

“The demand was more than the supply, and this causes an imbalance in the market, when the demand exceeds the supply. Of course, the result will be that prices have risen,” he added.

Al-Qasabi pointed to the Suez Canal obstruction in March 2021 as another event that added to global economic woes.

“We saw the blockage of the navigational movement and the cessation of the navigational movement in the Suez Canal, then after three months — in July 2021 — the second variant of the virus appeared and imposed a curfew again, which caused the closure of some ports and some cities,” he said.

In February 2022, the Russia-Ukraine conflict began. The minister said that the war affected transportation, too.

“We had a crisis between Russia and Ukraine, and we still do not know how long this crisis will last. These events combined, overlapped and completed, leading to a crisis in transportation and supply chains,” he said.

The transportation and supply chain crisis includes the disruption of some transportation ports, such as the main port of Shanghai, a sixfold increase in the cost of transportation, as well as surging freight insurance rates.

Al-Qasabi hailed King Salman’s royal order on Monday that approved the allocation of SR20 billion ($5.32 billion) to help citizens mitigate the impacts of rising global prices.

Half of the allocated money will go to social insurance beneficiaries and the Citizen Account Program.


Dubai office market records strong rental growth in 7 years: Report

Dubai office market records strong rental growth in 7 years: Report
Updated 3 min 10 sec ago

Dubai office market records strong rental growth in 7 years: Report

Dubai office market records strong rental growth in 7 years: Report

DUBAI: Dubai’s office market has seen rental growth for the first time since 2016’s first quarter, according to CBRE’s UAE Real Estate Market Review Q2 2022 report.

Looking at the office sector figures in the second quarter, Dubai-based commercial Ejari contracts increased by 28.1 percent year-on-year, according to the report. 

Average Prime and Grade A rents in Abu Dhabi fell by 6.9 percent and 1.1 percent, whereas the Grade B segment of the market saw average rents increase by 4.5 percent.

The UAE’s real estate sector continued to record strong activity and performance in the first half of the year, it said. 

Prime, Grade A, Grade B, and Grade C rents increased by 7 percent, 7.2 percent, 3.9 percent, and 3 percent, respectively, in the second quarter. 

According to CBRE, the market will continue to outperform Prime and Grade A assets due to the limited availability of quality stock.

Residential sector 

There was an increase of 2.2 percent in property prices in Abu Dhabi in the 12 months to June 2022, with an increase of 2.1 percent for apartments and 2.2 percent for villas. 

In the year to June 2022, apartment rents in the capital increased by 0.6 percent, while villa rents declined by 2.3 percent. A total of 33.2 percent of sales transactions took place in this period, primarily on Reem Island, Yas Island, and Saadiyat Island. 

Dubai’s average property price increased by 10.1 percent in the year to June 2022.

There was an 8.7 percent increase in average apartment prices and a 19.3 percent increase in average villa prices during this period. In the year to June 2022, average apartment and villa rents increased by 21.2 percent and 24.7 percent, respectively, the highest growth rate since July 2014. 

Over this period, 39,269 transactions have been recorded, the highest total since 2009. Over the year to June 2022, total transaction volumes were up 54.5 percent, with off-plan and ready transactions up 72.3 percent and 43.3 percent, respectively.

Hospitality sector 

CBRE reported that the UAE’s key performance indicators continued to show significant improvement in 2022.

 As of June 2022, the average occupancy rate had increased by 10.3 percentage points year-over-year.

Revenue per available room across the UAE now stands 16.9 percent above 2019 levels on a year-to-date basis through June 2022.

The growth has primarily been driven by Fujairah, Dubai, and Sharjah, where RevPAR has grown by 26.7 percent, 20.6 percent, and 10.5 percent, respectively. 

The report said it predicted a steeper decline in performance than usual during the summer. Despite this, the project has not materialized as expected. 

According to the report, local and regional events are likely to boost performance for the remainder of the year.

Retail sector 

The number of retail visits in Abu Dhabi and Dubai exceeded their respective pre-pandemic baselines by 13 and 12.3 percent, respectively. 

A total of 6,540 new retail Ejari contracts were registered in Dubai in the second quarter of 2022, up 1.8 percent from the same period last year, and 10,193 contracts were renewed, up 16.1 percent.

Retail operators in Abu Dhabi are still hesitant to acquire new space due to COVID-19 regulations, and existing occupiers are content to maintain their existing footprints and lock in rents. 

The average retail rent in Abu Dhabi remained flat in the year to Q2 2022, while it increased by 22.0 percent in Dubai.


Climate change causes wonky bumblebee wings: scientists

Climate change causes wonky bumblebee wings: scientists
Updated 22 min 43 sec ago

Climate change causes wonky bumblebee wings: scientists

Climate change causes wonky bumblebee wings: scientists
  • The large furry bees, known for their distinctive buzz, only feed on flowers, making them vulnerable to changes to the countryside due to intensive farming
  • Their population has declined in Britain over the past century, with two species becoming extinct

LONDON: Warmer and wetter weather linked to climate change appears to stress out bumblebees and make their wings more asymmetrical, which could ultimately affect their future development, according to UK scientists in a new research paper.
“With hotter and wetter conditions predicted to place bumblebees under higher stress, the fact these conditions will become more frequent under climate change means bumblebees may be in for a rough time over the 21st century,” scientists at Imperial College, London, wrote in the Animal Ecology journal on Wednesday.
The large furry bees, known for their distinctive buzz, only feed on flowers, making them vulnerable to changes to the countryside due to intensive farming.
Their population has declined in Britain over the past century, with two species becoming extinct, according to the Bumblebee Conservation Trust.
The Imperial College scientists looked at more than 6,000 bumblebee specimens in natural history museums, collected across Britain during the 20th century.
The scientists examined the right-left symmetry between the bees’ four wings, because asymmetry is an indication that the insect experienced stress during development.
They found that bees from the second half of the 20th century consistently had a higher average rate of asymmetry.
Asymmetry was also “consistently higher in warmer and wetter years,” according to the paper’s senior co-author Richard Gill.
“Overall, these results could suggest bumblebees experienced increasing stress as the century progressed and that aspects of climate change could have contributed to this trend,” the paper said.
The weather conditions linked to wonky wings “will likely increase in frequency with climate change,” it continued.
In April, scientists in the United States who studied more than 20,000 bees in the Rocky Mountains found that bumblebees had lower heat tolerance than smaller bees and were “more threatened under climate warming than other bees.”
Insects are facing a huge impact from both warming climate and intensive agriculture.
Another study released in April in the journal Nature found that these factors cause insect populations to plummet by nearly half compared to areas less affected by temperature rises and industrial farming.


Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya

Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya
Updated 35 min 46 sec ago

Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya

Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya

RIYADH: The Saudi government will continue to implement a ceiling on gasoline prices in the medium-term, the Kingdom’s deputy minister for macro-fiscal policy at the Ministry of Finance told Al-Arabiya. 

Thamer Al-Jared said the Kingdom’s objection to the International Monetary Fund’s proposal to raise the ceiling of gasoline prices comes in line with the government’s policy. 

He said with the current policy the government seeks to keep inflation under control. 

Global inflation exceeded 8 percent in many countries, while it is still at 2.3 percent in Saudi Arabia, which reflects the success of the Kingdom’s policies in this regard.


Arab economies expected to grow at a rate of 5.4% in 2022: AMF report

Arab economies expected to grow at a rate of 5.4% in 2022: AMF report
Updated 39 min 10 sec ago

Arab economies expected to grow at a rate of 5.4% in 2022: AMF report

Arab economies expected to grow at a rate of 5.4% in 2022: AMF report

RIYADH: Arab countries’ economies are likely to grow at an average annual rate of 5.4 percent in 2022 mainly driven by rising oil prices, a hike in crude production by oil exporters and the ongoing reforms to diversify economies, according to a report issued by the Arab Monetary Fund. 

The report titled “Arab Economic Outlook” noted that Arab countries could face relatively high inflation rates in 2022 due to local and global inflationary pressures. According to the report, Arab countries’ inflation rate is expected to reach 7.6 percent in 2022 and 7.1 percent in 2023.

It, however, predicted that the economic growth of Arab countries will slow to about 4 percent in 2023 due to a decline in the global economic growth, high commodity prices, and gradual exit from expansionary fiscal and monetary policies.

According to the report, Gulf Cooperation Council economies will grow 6.3 percent in 2022 compared to 3.1 percent in 2021, driven by recovery from pandemic, economic reforms and continued adoption of stimulus packages, while 2023 will see a decline to 3.7 percent in economic growth.

The economy of other oil-rich Arab countries will achieve 4.1 percent growth rate in 2022, compared to a 2.7 percent growth rate in 2021. The growth in these countries will slow down to 4.6 percent in 2023.


Wildfires in Portugal, Spain contained

Wildfires in Portugal, Spain contained
Updated 37 min 31 sec ago

Wildfires in Portugal, Spain contained

Wildfires in Portugal, Spain contained
  • The fires in both countries followed punishing heatwaves and long dry spells, leaving forests parched and primed to burn
  • With more hot weather forecast, however, there were fears it could flare up again

LISBON: Massive wildfires in Portugal and Spain were largely under control Thursday after forcing thousands from their homes and destroying large swathes of land.
The fires in both countries followed punishing heatwaves and long dry spells, leaving forests parched and primed to burn.
In Portugal, over 1,000 firefighters were still deployed in the Serra da Estrela national park, but the blaze was mostly contained after days of burning out of control.
With more hot weather forecast, however, there were fears it could flare up again.
“The fire is under control, but it is not extinguished. Consolidation work will continue in the coming days,” civil protection commander Miguel Oliveira told TSF radio.
“It is always possible, and very likely, that there will be new reactivations, but we hope that they do not take on worrying proportions,” he said.
The huge fire in central Portugal was brought under control last week, only to restart again Monday.
More than 25,000 hectares (nearly 61,800 acres) of land is estimated to have been scorched by the fire in the UNESCO-listed park, home to diverse wildlife species including wildcats and lizards.
Forecasts are predicting a fresh heatwave on Saturday, the latest in a string of hot spells in Portugal this year. July was the hottest on record in nearly a century.
Interior Minister Jose Luis Carneiro said Wednesday “we will experience increased risks” of fires in the coming days due to hot and dry conditions.
In neighboring Spain, rain and lower temperatures eased pressure on firefighters who for days have been battling two major fires in the eastern Valencia region, officials said Thursday.
“Finally, some good news: the rain and the drop in temperatures have helped to contain the fire in Vall d’Ebo,” regional leader Ximo Puig tweeted late Wednesday.
He hoped the conditions would also “help stabilize the fire in Bejis” further north.
By Thursday morning, there were “few visible flames left,” Puig told Cadena Ser radio, as the emergency services said the rain had almost completely put out the fires.
The two wildfires had forced the evacuation of 3,000 people and burnt their way through some 25,000 hectares.
So far this year, Spain has been hit by 391 wildfires, which have destroyed over 283,000 hectares of land in total, the latest figures from the European Forest Fire Information System show.
This year’s fires in Spain have been particularly devastating, destroying more than three times the area consumed by wildfires in the whole of 2021, which totalled over 84,000 hectares, the figures show.
In Portugal, some 92,000 hectares have burned this year, according to the Institute for Nature Conservation and Forests, in the worst fires since 2017 when around 100 people were killed.
Experts say climate change driven by human activity is boosting the intensity and frequency of extreme weather events, such as heatwaves, droughts and wildfires.