Saudi Arabia’s industrial production rises by 16.8% in August: GASTAT

Update Saudi Arabia’s industrial production rises by 16.8% in August: GASTAT
Mining and quarrying helped drive the growth (Shutterstock)
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Updated 10 October 2022

Saudi Arabia’s industrial production rises by 16.8% in August: GASTAT

Saudi Arabia’s industrial production rises by 16.8% in August: GASTAT

RIYADH: Saudi Arabia’s Industrial Production Index increased by 16.8 percent in August compared to the same period a year ago, according to the latest General Authority for Statistics report.

The growth in IPI was primarily driven by high production in the three subsectors — mining and quarrying, manufacturing, and electricity and gas supplies, official data showed.

The growth of the IPI turned positive in May 2021, and it has been growing continuously since then. This comes after negative trends witnessed during 2019 and 2020 due to the impacts of the pandemic.

IPI is an economic indicator that reflects the relative changes in the volume of industrial output, according to GASTAT.

According to the report, mining and quarrying grew by 15.5 percent in August from a year ago as the Kingdom increased its oil production to its highest level by more than 11 million barrels per day in August 2022.

When compared with July 2022, mining and quarrying witnessed a month-on-month growth of 2.2 percent in IPI activity, showed the data. 

The report further noted that the manufacturing activity increased by 22 percent compared to the same month of the previous year, while electricity and gas supplies increased by 11.3 percent.

Compared with the previous month, manufacturing activity recorded month-on-month growth of 3.9 percent in August, while electricity and gas grew by 10.6 percent.

Even though Saudi Arabia’s IPI is still showing positive trends, its growth has slowed down for the fourth month in a row from a 26.7 year-on-year growth recorded in April 2022.

The Kingdom’s IPI growth at 16.8 percent in August has been the slowest since January of this year when industrial production grew by 11.1 percent year-on-year. 

The GASTAT report showed that the IPI in Saudi Arabia amounted to 139.1 in August, the highest since June of 2018 when the index totaled 141.1.

Mining and quarrying witnessed an IPI growth of 135.8 in August, the highest since November 2018 when it amounted to 135.9. 

While the IPI of manufacturing, and electricity and gas amounted to 147.8 and 155.8 respectively, showed the report. 

The former last reached this peak in September 2019 at 150.4, whereas the latter reached this peak prior to 2018, as shown by GASTAT data.

KAPSARC bags key UN Environment Program role

KAPSARC bags key UN Environment Program role
Updated 29 sec ago

KAPSARC bags key UN Environment Program role

KAPSARC bags key UN Environment Program role

RIYADH: Saudi Arabia will soon become an active partner in global ecological governance after the UN granted the King Abdullah Petroleum Studies and Research Center a key role in its environmental activities. 

According to a KAPSARC press note, the think tank will now be able participate in global energy, climate and environment dialogues, as well as adopt an observer status, after being handed a place in the UN Environment Program.

Building on its accreditation by the UN Framework Convention on Climate Change, KAPSARC’s new status will enable it to deliver evidence-based reporting and policy recommendations, particularly in this crucial phase of climate change conversations. 

Brian Efird, director of strategic partnerships at KAPSARC, highlighted that this accreditation grants the center “the privilege of receiving unedited working documents of the UN Environment Assembly at the same time as the Committee of the Permanent Representatives.” 

He added: “Moreover, KAPSARC gains the ability to submit written contributions, actively participate in official UNEA meetings, and make valuable oral and written contributions during these sessions.” 

KAPSARC has already embraced its commitment to the UNEP by participating in the second session of the Intergovernmental Negotiating Committee in Paris from May 29 to June 2. 

The discussion focused on developing an international framework to address plastic pollution. 

During the conference, KAPSARC played a significant part in the discussions, contributing expertise and insights to help shape effective global strategies and policies in the area.

KAPSARC highlighted the value of a circular plastic economy, including reduction, reuse, recycling and removal strategies. The center expressed support for technologies that can contribute to these goals. 

Top Saudi banks maintain profitability in Q1 despite global headwinds: Alvarez & Marsal

Top Saudi banks maintain profitability in Q1 despite global headwinds: Alvarez & Marsal
Updated 06 June 2023

Top Saudi banks maintain profitability in Q1 despite global headwinds: Alvarez & Marsal

Top Saudi banks maintain profitability in Q1 despite global headwinds: Alvarez & Marsal

RIYADH: Saudi Arabia’s top banks have continued to register steady earnings growth while maintaining profitability despite global headwinds amid rising interest rates, according to global professional services firm Alvarez & Marsal.

The analysis by the New York-headquartered company revealed the Kingdom’s leading 10 banks collectively recorded 2.7 percent quarter-on-quarter growth in net profits during the first three months of the year to hit SR17.3 billion ($4.61 billion).

The report noted that the boost in profitability was driven by significant growth in non-core income and a rise in cost efficiencies.  

The Saudi banks managed to enhance and maintain the return on equity well above the pre-pandemic levels as their aggregate RoE increased by 67 basis points to 15.2 percent in the first quarter against the previous three months. 

Their return on assets remained stable at 2 percent, with average total assets growing by 3.7 percent during the same period, the report noted. 

“We consider the Saudi banks’ capital position to be strong. Profitability for the quarter marginally improved due to an increase in operating income, mainly owing to a growth in non-core income which was further supported by higher impairments,” said Asad Ahmed, managing director and head of Middle East financial services at Alvarez & Marsal, in a statement. 

He noted the higher interest rate environment is causing customers to migrate to interest-bearing instruments that could likely affect the cost of funding for some banks in the coming months.  

“Looking ahead, we expect banks to face a slowdown in credit growth and a possible uptick in non-performing loans due to the higher interest rate environment. Saudi Central Bank has maintained its interest rates in line with the US Federal Reserve, and we expect this to continue,” added Ahmed.  

The report further revealed that Saudi banks recorded a 4.7 percent growth in deposits and a 3.2 percent rise in loans and advances. 

Highlighting the growth of the private sector in the Kingdom, the analysis found that retail loans and corporate loans witnessed a quarter-on-quarter growth of 2 percent and 4.2 percent, respectively.  

The report further pointed out that the net interest margin of these top banks in Saudi Arabia during the first quarter remained stable at 3.08 percent, although it is slightly down from the 3.15 percent recorded in the previous three-month period.  

Saudi Arabia’s top 10 listed banks analyzed in the report include Saudi National Bank, Al Rajhi Bank, and Riyad Bank, as well as Saudi British Bank, Banque Saudi Fransi, and Arab National Bank.  

The other banks examined by Alvarez & Marsal were Alinma Bank, Bank Albilad, Saudi Investment Bank, and Bank Aljazira. 

The analysis looked at these banks’ key performance areas, including size, liquidity, income, operating efficiency, risk, profitability, and capital.

UAE In-Focus — Air Arabia to double fleet capacity in 12 months

UAE In-Focus — Air Arabia to double fleet capacity in 12 months
Updated 06 June 2023

UAE In-Focus — Air Arabia to double fleet capacity in 12 months

UAE In-Focus — Air Arabia to double fleet capacity in 12 months

RIYADH: Air Arabia Abu Dhabi, the UAE’s low-cost airline, has unveiled plans to double its current fleet capacity within the next 12 months, state-run news agency WAM reported. 

According to Adel Al-Ali, group CEO of Air Arabia, the expansion will strengthen both inbound tourism and the emirate’s long-term vision of attracting regional and global visitors. 

Al-Ali also highlighted the significant growth of visitors to Abu Dhabi, which witnessed 15.9 million guests in 2022, nearly triple the number seen in 2021.  

“Air Arabia Abu Dhabi is supporting the UAE capital’s growing prominence as a global tourism and business hub. Doubling the fleet strength will be crucial to meet growing passenger demand for low-cost travel as the city records a new wave of tourism growth,” said Al-Ali. 

In collaboration with Etihad Airways, Air Arabia has been playing a crucial role in catering to the growing low-cost travel market segment in the region. 

“Committed to providing the highest quality of service to our customers, we are exploring new and agile technologies and services to enhance customer experience and provide a distinctive value proposition to all our passengers,” he added. 

UAE’s Ministry of Finance imposes new tax 

The UAE’s Ministry of Finance has announced a new decision regarding taxing income earned by foreign companies and non-resident juridical persons from real estate and other immovable properties. 

According to the new decision, such entities will be subject to corporate tax on income generated from these dead assets, WAM reported. 

However, income from real estate investments earned by foreign individuals or UAE residents, directly or through any legitimate bodies, will not be subject to corporate tax, provided they are not involved in a licensed business activity. 

UAE and Vietnam eye stronger trade ties  

The UAE and Vietnam have started discussing a comprehensive economic partnership agreement to boost bilateral trade. 

Thani Al-Zeyoudi, the UAE minister of state for foreign trade, discussed the agreement while attending a bilateral meeting with Vietnamese Prime Minister Pham Minh Chin during a visit to Hanoi, WAM reported. 

“Vietnam is the UAE’s leading trade partner among the Association of Southeast Asian Nations, with bilateral non-oil trade totaling $8.7 billion in 2022, which accounts for 27 percent of trade with the bloc,” Al-Zeyoudi said. 

The purpose of the meeting was to mark the initiation of negotiations for the agreement. 

The discussions also touched on the World Trade Organization’s 13th Ministerial Conference, which will be held in Abu Dhabi next year. 

“The proposed UAE-Vietnam comprehensive economic partnership agreement will push these figures even higher and underline the benefits of open, rules-based trade,” Al-Zeyoudi added. 

Dubai empowers startups to fuel digital transformation  

Dubai Chamber of Digital Economy announced it attracted 30 startups in the technology sector in the first three months of 2023 to boost the development of the digital economy and enhance investor appeal.  

The chamber has also successfully conducted 10 interactive workshops designed specifically for the private sector, concentrating on distinct aspects of the digital economy, WAM reported.  

These workshops provided valuable insights and practical guidance to help businesses thrive in the rapidly evolving digital landscape.

“We aim to chart a roadmap for strengthening the emirate’s digital infrastructure, develop legislation that supports the growth of tech companies, and enhance the digital economy’s competitiveness and contribution to Dubai’s overall economic growth,” said Omar Al-Olama, chairman of Dubai Chamber of Digital Economy.

With an ambitious strategy, the chamber is set to attract 300 new digital startups in the years ahead. 

It will host the highly anticipated Expand North Star summit in October as part of this initiative.   

The event, recognized as the region’s largest gathering of startups, will serve as a platform to highlight the emerging growth opportunities within Dubai’s thriving digital economy.

Mawani inks deal with Saudi Post in logistics development boost

Mawani inks deal with Saudi Post in logistics development boost
Updated 06 June 2023

Mawani inks deal with Saudi Post in logistics development boost

Mawani inks deal with Saudi Post in logistics development boost

RIYADH: In a bid to materialize the goals outlined in Saudi Arabia’s National Transport and Logistics Strategy, Saudi Ports Authority, also known as Mawani, has entered into a strategic partnership agreement with Saudi Post to manage the authority’s postal requirements. 

The agreement was signed by Majid Al Malik, vice president for Shared Services and Digital Transformation at Mawani, and Rakan Al-Daifallah, general manager of Government Sales, the Saudi Press Agency reported. 

According to the report, this new collaboration between these public sector entities will leverage the latest technologies and advanced capabilities to create a high-performing and cost-efficient logistics sector in Saudi Arabia. 

The partnership also aligns with Saudi Arabia’s efforts to improve its ranking in the World Bank Logistics Performance Index. 

Saudi Arabia’s National Transport and Logistics Strategy aims to position the Kingdom as a global logistics hub connecting three continents by improving all transport services,  including boosting the capabilities of the air cargo sector by doubling capacity to more than 4.5 million tons by 2030. 

Under this new strategic agreement, Saudi Post will manage Mawani’s postal requirements through its Express Mail Service, therefore providing a customized solution that caters to both government and non-government sectors. 

It will also ensure a cost-effective distribution channel for domestic and international operations.

In April, it was reported that Saudi Arabia has jumped 17 places to claim 38th rank in the World Bank’s Logistics Performance Index 2023. 

According to the World Bank report, the Kingdom has made great strides in performance efficiency through several sub-indicators, such as trade and transport infrastructure, shipment frequency tracking and tracing facilities, customs clearance, and quality of maritime freight. 

“This progress came with the support of the Crown Prince and the ambitious goals of the National Strategy for Transport and Logistics Services,” said Minister of Transport and Logistics Saleh Al-Jasser at the time.

The minister added that the strategy contains broad structural reforms and qualitative strategic initiatives, to strengthen operational efficiency, which will ultimately affirm the position of the Kingdom in the global logistics map.

Turkey rate hike to 25% in June is ‘on the table’ — JPMorgan 

Turkey rate hike to 25% in June is ‘on the table’ — JPMorgan 
Updated 06 June 2023

Turkey rate hike to 25% in June is ‘on the table’ — JPMorgan 

Turkey rate hike to 25% in June is ‘on the table’ — JPMorgan 

NEW YORK: An interest rate hike to 25 percent from the current 8.5 percent is on the cards for Turkey’s Monetary Policy Committee’s upcoming meeting on June 22, “if not earlier,” JPMorgan economists said on Monday. 

“A policy rate hike to 25 percent, from the current level of 8.5 percent, is on the table for 22 June or earlier, along with forward guidance suggesting smaller rate hikes if needed,” the Wall Street bank said to clients in an economic research note. “We maintain our year-end policy rate forecast at 30 percent.” 

Years of unconventional policies such as cutting interest rates despite hot inflation have weighed on investor views of Turkey, as well as on voter sentiment ahead of President Tayyip Erdogan’s reelection late last month. 

But there has been guarded optimism for a shift in monetary policy since veteran policy maker Mehmet Simsek returned to head Turkey’s Finance Ministry.