IMF sees high rates, oil prices and inflation worries in Middle East 

IMF sees high rates, oil prices and inflation worries in Middle East 
The IMF on Thursday forecast that GDP growth in the Middle East and North Africa region will slow to 3.1 percent in 2023, from 5.3 percent a year ago. (Shutterstock)
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Updated 16 April 2023
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IMF sees high rates, oil prices and inflation worries in Middle East 

IMF sees high rates, oil prices and inflation worries in Middle East 

WASHINGTON: Banks in the Middle East and Central Asia have very limited exposure to last month's banking turmoil in the US and Europe, but financial pressures are adding to strains caused by high interest rates, volatile oil prices and years of double-digit inflation, a top IMF official said on Saturday. 

Jihad Azour, director of the International Monetary Fund's Middle East and Central Asia department, said the banking sector strains came on top of tighter monetary policies that raised rates and reduced accessibility to finance. 

Azour said there was an increasing gulf between countries that had good credit and were able to access the markets, including Morocco, Jordan and oil exporters, and others who were struggling. 

"We are worried because the matrix of risks keeps growing: high interest rates, volatility in oil prices, geopolitical tensions, and it's the third year in the row where you have double-digit inflation," he said. 

Stability in the financial sector was not the primary concern, he said, trumped for now by worries about high debt levels, the risk of social unrest and the ability to maintain tight policies because of pressures on the social front. 

"We see vulnerabilities going up again, and this is why countries are encouraged to do more structural reforms, to inch up their growth by at least one or two percent," he said. "And they have a window of opportunity with governments now willing to do more, and not to put money in the central bank coffers." 

The IMF on Thursday forecast that GDP growth in the Middle East and North Africa region will slow to 3.1 percent in 2023, from 5.3 percent a year ago. 

 


ADNOC says AI added $500m of extra value in 2023 

ADNOC says AI added $500m of extra value in 2023 
Updated 10 sec ago
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ADNOC says AI added $500m of extra value in 2023 

ADNOC says AI added $500m of extra value in 2023 

DUBAI: Abu Dhabi National Oil Co. generated $500 million of additional value in 2023 by using artificial intelligence, the company said on Tuesday. 

“The value was generated from the integration of over 30 industry-leading AI tools across ADNOC’s full value chain, from field operations to smarter and quicker corporate decision making,” ADNOC said in a statement. 

The use of AI also prevented up to 1 million tonnes of carbon dioxide emissions between 2022 and 2023, the state oil giant said. 

“As we grow our diversified portfolio to ensure secure, reliable and responsible supply of energy, we are further integrating AI to future-proof our business and drive greater and more sustainable value from our assets and resources,” Group Chief Executive Sultan Al Jaber said in the statement. 

AI tools used by ADNOC include ones developed by AIQ, a joint venture with Abu Dhabi artificial intelligence company G42. 

AI is being applied to ADNOC operations including production activities, reservoir management and growing capacity, Chief Technology Officer Sophie Hildebrand said. 

“Many of these initiatives generated greater automation, optimization of our processes, they improve efficiency, they’ve helped us make improvements to cap ex, op ex, working capital, production ... really, things that you can touch and measure,” Hildebrand said. 

“The ability for us to do more and more is growing as the technology grows,” she said, adding that she expected the value generated by AI to rise but declining to provide figures. 


Day 2 of LEAP24 sees $848m investments across 7 new funds 

Day 2 of LEAP24 sees $848m investments across 7 new funds 
Updated 36 min 53 sec ago
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Day 2 of LEAP24 sees $848m investments across 7 new funds 

Day 2 of LEAP24 sees $848m investments across 7 new funds 

RIYADH: Investment funds worth $848 million were announced on the second day of Saudi Arabia’s international technology conference, LEAP, in a major boost for the region’s venture capital ecosystem.

The money will be split across seven entities, as the third edition of the event continues to witness several significant announcements that seek to transform the technology sector locally and globally. 

Kicking off the day, InvestCorp announced the establishment of a $500 million fund in Saudi Arabia, which includes a $35 million investment from Saudi Venture Capital Co.

The fund will focus on investing in Saudi companies in their growth stages. 

In another boost to emerging companies, Saudi Arabia’s Takamol Holding announced their venture capital arm, Takamol Ventures, equipped with a $53 million investment.

The VC is established to support early-stage technology companies in the Middle East and African markets. 

Similarly, Oasis Capital unveiled their “Oasis Fund II,” a $100 million venture dedicated to empowering international tech founders in their early stages.


UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global

UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global
Updated 05 March 2024
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UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global

UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global

RIYADH: The UAE’s non-oil private sector expanded in February as it delivered the strongest output growth since June 2019, according to S&P Global’s purchasing managers’ index report.

The analysis saw the Middle Eastern country given a PMI standing of 57.1 – up from 56.6 in January – with increased new business, more robust client activity, and intensified marketing and development efforts contributing to this growth.

A PMI above 50 indicates that the sector is expanding, while below that number suggests contraction.

Meanwhile, business activity in Egypt’s non-oil private sector declined at the sharpest rate in just over a year, with the PMI dropping from 48.1 in January to 47.1 in February, according to S&P Global Egypt PMI. This marked the lowest level in 11 months and is weaker than the survey’s long-run trend.

The drop in activity can be attributed to several factors, including the worsening foreign exchange crisis as the sharp decline in Suez Canal trade due to Red Sea shipping disruptions exacerbated shortages of the US dollar and other foreign currencies. 

This, in turn, led to substantial increases in purchasing costs and contributed to the most significant lengthening of supplier delivery times since June 2022.

“Red Sea shipping disruption has roughly halved Suez Canal revenues so far in 2024, which February PMI survey data indicated had a considerable impact on foreign currency inflows and inflationary pressures,” said Senior Economist at S&P Global Market Intelligence, David Owen.

Supply chain disruptions from Red Sea shipment issues were also a challenge to the UAE private sector, leading to input delivery delays and a backlog of work. However, according to the report, supplier performance remained generally positive, with prompt input distribution when requested.

“One of the PMI’s largest components, the output index, rose to its highest level since June 2019, pointing to a rapid expansion of business activity ... capacity pressures were apparent, however, with backlogs of work rising at their fastest pace in nearly four years, as Red Sea shipping disruption fed through into transport delays,” Owen commented.

Consequently, hiring activity accelerated to manage workloads and address backlog growth, increasing employment levels at the fastest rate since May 2023, as reported.

While overall input costs rose in the UAE, driven by increases in material prices and wages, firms opted for price cuts. This strategy was aimed at retaining market share, often achieved through offering discounts to clients, according to the report.

In contrast, Egyptian companies opted to transfer increased purchase costs to customers, resulting in a sharp increase in selling charges, the most significant in 13 months. Consequently, new orders experienced the fastest decline since March 2023, particularly in domestic sales facing mounting price pressures.

Heightened inflationary pressures, particularly in wages, were noted as Egyptian firms raised salaries in response to the cost-of-living crisis. Consequently, there was a decrease in hiring activity within the non-oil private sector in the first quarter, with recent data indicating a slight decline in workforce numbers, according to the report.


PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 

PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 
Updated 05 March 2024
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PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 

PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 

RIYADH: Semiconductor manufacturing in Saudi Arabia is to be boosted by workers from the Kingdom after Public Investment Fund company Alat signed a partnership to drive localization.

Inked with the King Abdulaziz City for Science and Technology, the deal aims to support national goals for research, development, and innovation in the energy and industry sectors by developing local capabilities, while positioning the Kingdom as a global hub for the strategic semiconductor industry. 

Signed at LEAP 2024 in Riyadh, the partnership agreement, inked by Muneer bin Mahmoud Al-Dosouqi, president of KACST, and Amit Midha, CEO of Alat, aligns with Saudi Vision 2030 goals for economic growth and diversification. 

Midha said: “Alat aims to enable the establishment of next generation industry in Saudi Arabia, and by partnering with a renowned institution such as KACST, with its deep expertise in advanced technologies and talent development, we will play an essential role in the creation of Saudi Arabia’s own semiconductor industry.” 

The agreement with KACST will be spearheaded by Alat’s Semiconductor Business Unit, overseeing the development and manufacturing of chips in three pivotal technology segments: power, perception, and processing. 


Minister launches digital products and services to support families during LEAP

Minister launches digital products and services to support families during LEAP
Updated 05 March 2024
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Minister launches digital products and services to support families during LEAP

Minister launches digital products and services to support families during LEAP

RIYADH: Saudi families are set to gain easy access to a diverse range of social and digital support services, according to the human resources and social development minister.

The offerings and products were unveiled by Ahmed bin Sulaiman Al-Rajhi on March 4 during LEAP 2024, the ongoing third edition of the world’s biggest tech event in Riyadh.

They were aimed at advancing the ministry’s digital transformation agenda and simplifying access to services for beneficiaries, according to the HRSD website.

The offerings encompassed the family guidance system and consultations, facilitating access to counsellors through accredited specialists. Additionally, the social specializations system was launched, overseeing the issuance and management of licenses for specialists, and validating their professional classifications.

The introduction of the family protection system facilitates the registration and monitoring of reported cases through integration with relevant security authorities, ensuring the confidentiality and safety of both beneficiaries and reporters.

Al-Rajhi also initiated the empowerment service on the social support and protection platform, with the goal of empowering and preparing social security beneficiaries for employment through customized training programs aligned with their educational qualifications and skill sets.

The support platform, which assisted over 100,000 young people in 2023, offers training opportunities for beneficiaries to enhance their cognitive skills, with a focus on aligning labor market needs with job seekers, assisting startups and small businesses, and enhancing the well-being of social security beneficiaries.

The services also included business management, aiming to facilitate business practice procedures to be automated and integrated between relevant entities through the Qiwa platform, aiming to improve beneficiary experience and maintain business continuity, in integration with 13 government entities.