Global economy faces tougher year in 2023, IMF’s Georgieva warns

Global economy faces tougher year in 2023, IMF’s Georgieva warns
IMF Managing Director Kristalina Georgieva. (AFP)
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Updated 02 January 2023

Global economy faces tougher year in 2023, IMF’s Georgieva warns

Global economy faces tougher year in 2023, IMF’s Georgieva warns

NEW YORK: For much of the global economy, 2023 is going to be a tough year as the main engines of global growth — the US, Europe and China — all experience weakening activity, the head of the International Monetary Fund said on Sunday. 

The new year is going to be "tougher than the year we leave behind," IMF Managing Director Kristalina Georgieva said on the CBS Sunday morning news program "Face the Nation." 

"Why? Because the three big economies — the US, EU and China — are all slowing down simultaneously," she said. 

In October, the IMF cut its outlook for global economic growth in 2023, reflecting the continuing drag from the war in Ukraine as well as inflation pressures and the high interest rates engineered by central banks like the US Federal Reserve aimed at bringing those price pressures to heel. 

Since then, China has scrapped its zero-COVID policy and embarked on a chaotic reopening of its economy, though consumers there remain wary as coronavirus cases surge. In his first public comments since the change in policy, President Xi Jinping on Saturday called in a New Year's address for more effort and unity as China enters a "new phase." 

"For the first time in 40 years, China's growth in 2022 is likely to be at or below global growth," Georgieva said. 

Moreover, a "bushfire" of expected COVID infections there in the months ahead are likely to further hit its economy this year and drag on both regional and global growth, said Georgieva, who traveled to China on IMF business late last month. 

"I was in China last week, in a bubble in a city where there is zero COVID," she said. "But that is not going to last once people start traveling." 

"For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative," she said. 

In October's forecast, the IMF pegged Chinese gross domestic product growth last year at 3.2 percent — on par with the fund's global outlook for 2022. At that time, it also saw annual growth in China accelerating in 2023 to 4.4 percent while global activity slowed further. 

Her comments, however, suggest another cut to both the China and global growth outlooks may be in the offing later this month when the IMF typically unveils updated forecasts during the World Economic Forum in Davos, Switzerland. 

US Economy 'most resilient'  

Meanwhile, Georgieva said, the US economy is standing apart and may avoid the outright contraction that is likely to afflict as much as a third of the world's economies. 

The "US is most resilient," she said, and it "may avoid recession. We see the labor market remaining quite strong." 

But that fact on its own presents a risk because it may hamper the progress the Fed needs to make in bringing US inflation back to its targeted level from the highest levels in four decades touched last year. Inflation showed signs of having passed its peak as 2022 ended, but by the Fed's preferred measure, it remains nearly three times its 2 percent target. 

"This is ... a mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down," Georgieva said. 

Last year, in the most aggressive policy tightening since the early 1980s, the Fed lifted its benchmark policy rate from near zero in March to the current range of 4.25 percent to 4.50 percent, and Fed officials last month projected it will breach the 5 percent mark in 2023, a level not seen since 2007. 

Indeed, the US job market will be a central focus for Fed officials who would like to see demand for labor slacken to help undercut price pressures. The first week of the new year brings a raft of key data on the employment front, including Friday's monthly nonfarm payrolls report, which is expected to show the US economy minted another 200,000 jobs in December and the jobless rate remained at 3.7 percent — near the lowest since the 1960s. 

Riyadh Airports CEO joins international aviation body

Riyadh Airports Co. CEO Musad Aldaood (File)
Riyadh Airports Co. CEO Musad Aldaood (File)
Updated 29 May 2023

Riyadh Airports CEO joins international aviation body

Riyadh Airports Co. CEO Musad Aldaood (File)

RIYADH: In significant global recognition of the Kingdom’s aviation sector, Riyadh Airports Co. CEO Musad Aldaood has been elected to the board of the Airports Council International, Asia-Pacific.   

This assembly of airport authorities is dedicated to improving airport operations and standards, representing their collective interests with international organizations like International Civil Aviation Organization and International Air Transport Association.  

The announcement was made during the 18th meeting of the ACI Asia-Pacific Assembly in Kobe, Japan. 

Aldaood joined leaders from airports across mainland Asia, Australasia, the Pacific Ocean islands and key North American points such as Vancouver, San Francisco and Hawaii.  

Commenting on his appointment, Aldaood said he was looking forward to working with other board members, the World Executive Committee, regional advisers, and the management team to continuously make airports a great and safe place for travelers and airport partners.   

“We will devote our expertise and efforts to improve the aviation sector, raise the aspirations and expectations, and work with relevant sectors in a joint and integrated manner to develop our work through the ACI World Governing Board, Asia-Pacific and the Middle East,” he said.  

Aldaood brings over 21 years of experience managing and operating King Khalid International Airport under the RAC.   

He also holds concurrent positions as the vice chair of the board of directors of Saudi Public Transport Co. and a board member of Altanfeethi Co., overseeing executive terminals and offices across the Kingdom’s airports.  

New shipping service added to Kingdom’s Dammam port

New shipping service added to Kingdom’s Dammam port
Updated 29 May 2023

New shipping service added to Kingdom’s Dammam port

New shipping service added to Kingdom’s Dammam port

RIYADH: Traffic at the King Abdulaziz Port in Dammam will soon ease thanks to the addition of Swiss-based Mediterranean Shipping Co.’s new service, the Saudi Press Agency reported.

The Upper Gulf Express shipping service aligns with the objectives of the National Transport and Logistics Strategy to position the Kingdom as a global logistics hub connecting three continents, the General Authority of Ports said. 

The shipping service connects Dammam with the ports of Abu Dhabi and Sharjah in the UAE as well as the Iraqi port of Umm Qasr.  

The service which is set to launch at the end of May also consolidates the position of the King Abdulaziz Port as the main port through which goods pass from all over the world. 

In January this year, the ports authority announced the launch of a new freight service at King Abdulaziz Port operated by MSC.    

The connection allows Dammam to enjoy weekly sailings to eight maritime destinations spanning the Arabian Gulf, South Asia, and Southern Africa.    

These include the ports of Khalifa bin Salman in Bahrain, Khalifa in the UAE, Qasim in Pakistan, Mundra and Hazira in India, Port Louis in Mauritius, and Durban and Coega in South Africa.    

The service started on Jan. 21 and features five vessels with an average carrying capacity exceeding 6,000 twenty-foot equivalent units.

UAE’s Dana Gas raises its foreign ownership limit to 100% 

UAE’s Dana Gas raises its foreign ownership limit to 100% 
Updated 29 May 2023

UAE’s Dana Gas raises its foreign ownership limit to 100% 

UAE’s Dana Gas raises its foreign ownership limit to 100% 

RIYADH: The UAE’s vision of strengthening its capital markets has become one step closer to reality as Sharjah-based energy company Dana Gas plans to raise its foreign ownership limit to 100 percent. 

Listed on the Abu Dhabi market, the firm announced that it had obtained the approval of the regulatory authorities to raise the percentage of foreign ownership from 49 percent to 100 percent of its capital, according to a regulatory filing on the Abu Dhabi Securities Exchange. 

The largest private sector natural gas company in the region disclosed that the move aligns well with the UAE’s new Commercial Companies Law that abolished a requirement that UAE nationals own 51 percent of onshore firms. 

“Opening our company fully to foreign ownership will support the UAE’s vision of strengthening its dynamic capital markets by attracting greater numbers of international investors and deepening market liquidity,” said Dana Gas Chairman Hamid Jafar in a press statement. 

According to Jafar, the company’s growth outlook remained rather sturdy in the Kurdistan region of Iraq, where the firm is seeking to increase production. 

It also maintained a strong growth outlook in Egypt, where the firm is working on maximizing the value of its assets by negotiating improved fiscal terms. 

However, Dana Gas’ recent earnings report was not favorable. The company generated a net profit of 183 million UAE dirhams ($50 million) in the first quarter of 2023 compared to 198 million UAE dirhams in the year-ago period. 

Profitability for the quarter dropped 7 percent compared to a 22 percent decline in the company’s realized prices. However, the impact of lower realized prices on the company’s profitability was partially offset by reduced operating costs by 14 percent. 

Revenue was 13 percent lower at 447 million UAE dirhams in the first quarter of 2023 compared to 513 million UAE dirhams in 2022.

The decrease in revenue, and subsequently net profit, was primarily due to a pullback in energy prices from high levels. 

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%
Updated 29 May 2023

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%

RIYADH: Saudi Arabia’s Tadawul All Share Index lost 2.38 points or 0.02 percent to close at 11,135.67 on Monday.

While the parallel market Nomu shed 45 points to close at 21,007.84, the MSCI Tadawul Index edged down by 0.58 percent at 1,483.55.

The total trading turnover of the benchmark index was SR4.76 billion ($1.27 billion) as 111 listed stocks advanced, while 95 retreated.

Yanbu Cement Co. emerged as the best performer as its share price surged by 8.05 percent to SR40.95.AYYAN Investment Co. and Saudi Pharmaceutical Industries and Medical Appliances Corp. were other top gainers, as their share prices advanced by 6.71 percent and 5.45 percent respectively.

Astra Industrial Group was the worst performer, as its share price dropped by 3.22 percent to SR72.20.

Leejam Sports Co.’s share price was down by 3.20 percent to SR114.80, while stocks of Naseej International Trading Co. dipped by 3.03 percent to close at SR48.

Mayar Holding Co. was the top gainer on the Kingdom’s parallel market. The company’s share price soared by 15.82 percent to close at SR79.80.

Future Care Trading Co. was the worst performer on Nomu, as its share price went down by 8.83 percent.


Russia ‘welcomes goods from Saudi Arabia’

Russia ‘welcomes goods from Saudi Arabia’
Updated 29 May 2023

Russia ‘welcomes goods from Saudi Arabia’

Russia ‘welcomes goods from Saudi Arabia’
  • Russia can significantly benefit from Saudi imports in a wide range of economic sectors, says Gruzdev

RIYADH: Russia is willing to import and procure good technologies and expertise from its partners, the deputy minister of industry and trade of the Russian Federation said on Monday.

Alexey Gruzdev spoke to Arab News on the sidelines of a high-profile forum that began in Riyadh aimed at identifying investment opportunities to boost economic ties between Saudi Arabia and Russia.

Made in Russia + Innoprom is a two-day event consolidating both nations’ commitment to mutually beneficial partnerships and sustained growth.

Stressing the importance of imports to his country, Gruzdev urged Russian companies to explore the vast opportunities Saudi Arabia has to offer.

“Russian companies should come here (Saudi Arabia) to investigate and understand the experiences and capabilities of the local producers and also to see the materials, components, and services that can be imported from Saudi Arabia to Russia,” Gruzdev said.

Replying to Arab News question about measures Russia took to address the trade imbalance with Saudi Arabia, Gruzdev said: “The reason we came here is to look into this great turnover and find a way to improve.”

He added: “It might sound strange that as a producing country, we also talk about imports, but this is the model of modern Russia; we are not only able to supply to the world, but we are also ready to import and procure good technologies and expertise from our partners.”

Gruzdev further explained that the country is now implementing an import substitution strategy to replace suppliers who try to impose sanctions on Russia with products and services from friendly countries.

He said: “This kind of substitution means that we welcome goods from Saudi Arabia to Russia.”

The minister said that Russia can significantly benefit from Saudi imports in a wide range of economic sectors.

“A big part is machinery,” Gruzdev added, “we can also benefit a lot from biotechnology, chemicals, components, and raw materials … there is a wide selection of interest.”

Gruzdev stated that Saudi businesses could benefit from Russia’s large mining, pharmaceuticals, technology, and aviation industries.

“I would also suggest Saudi companies (to) invest in Russian startups and innovative companies in information technology, cybersecurity, and renewable energy,” he added.

The event highlighted the immense opportunities in the digital economy and advanced technologies, emphasizing the necessity of collaboration in these burgeoning fields. The infrastructure has sector also emerged as a promising avenue for joint ventures.

On the first day of the event, Saudi Deputy Minister of Investment Badr Al-Badr stressed the importance of Saudi-Russia trade relations. He said Russia is the 14th largest exporter to the Kingdom.

“The trajectory of Saudi exports to Russia has not followed the same path; Saudi exports to Russia between 2017 and 2022 have grown only by about 30 percent,” Al-Badr said.

He added: “In 2022, the value of the Saudi export to Russia was only 2 percent of the value of imports from Russia. This is clearly a major opportunistic area for us.”

The Saudi deputy minister also underscored crucial sectors such as energy, technology, and infrastructure, underlining their significant potential for bilateral cooperation.

Another key focus was the pivotal role of the energy and mining sectors, with Saudi Arabia being the leading global oil exporter and Russia being a major oil and gas powerhouse.

These initiatives reflect the joint resolve of Saudi Arabia and Russia to boost economic ties, setting a new growth trajectory in the post-pandemic era.