Gaza war looms large at Arab-British Economic Summit in London

Organized by the Arab-British Chamber of Commerce at the Hilton Metropole, government officials, senior executives, thought leaders and decision-makers will share ideas and debate trade and emergent investment opportunities in tech-based industries. (X/@ABCCnews)
Organized by the Arab-British Chamber of Commerce at the Hilton Metropole, government officials, senior executives, thought leaders and decision-makers will share ideas and debate trade and emergent investment opportunities in tech-based industries. (X/@ABCCnews)
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Updated 21 November 2023

Gaza war looms large at Arab-British Economic Summit in London

Gaza war looms large at Arab-British Economic Summit in London
  • Conflict must be resolved to unlock long-term prosperity, speakers say
  • British officials hail dynamism of Arab world in finance, technology, energy

LONDON: Business figures and government officials on Monday hailed expanding economic ties between the Arab world and the UK at the third Arab-British Economic Summit in London, organized by the Arab-British Chamber of Commerce.

However, they warned that the looming threat of an escalation in the Gaza conflict threatens to undermine years of economic progress.

The summit, of which Arab News is a media partner, aims to bolster business ties between the UK and the Arab world under the theme “Sustaining an Emerging Vision.”

In his opening remarks, Sameer Abdulla Nass, president of the Union of Arab Chambers, warned that “prosperity can’t exist without stability.”

He called on businesspeople, both British and Arab, to “influence their governments” and push for peace in Gaza.

Hosted by TV anchor Rebecca McLaughlin, the opening session also featured Baroness Symons of Vernham Dean; Bandar Ali Reda, ABCC secretary-general and CEO; Mohamed Al-Khadar Al-Ahmed, CEO of Khalifa Economic Zones Abu Dhabi; Arab League Secretary-General Ahmed Aboul Gheit; Lord Ahmad of Wimbledon, UK minister of state for the Middle East; and Oliver Christian, British trade commissioner for the Middle East and Pakistan at the Department of Business and Trade.

Symons opened her remarks by hailing the myriad opportunities for expanded Arab-UK trade in finance, technology, energy, medicine and agriculture.

She urged both sides to “confront the greatest challenge of our time” — climate change — at the upcoming UN Climate Change Conference in the UAE.

Investments between the Arab world and the UK are “guided by strategies implemented by visionary leaders who are absolutely determined to address the core needs of their citizens,” Symons said.

She added that friendship between the two sides is “absolutely pivotal,” hailing the “dynamism” shown by the Arab world, and lauding the “strategic” role played by Arab embassies and ambassadors in the UK.

Ali Reda said the size and scope of the summit’s third edition demonstrates the strength of relations and history between the Arab world and the UK.

Lord Ahmed, who recently returned from the Manama Dialogue in Bahrain — which gathers national leaders, ministers and policymakers from around the world to discuss the most

pressing regional security issues and share policy responses — said: “As we join here this morning, in the spirit of friendship, in the spirit of collaboration, it would be remiss of me, indeed for any of us, not to begin by reflecting on what’s happening right now across Israel, Gaza, and sadly in the West Bank. The intensity of what’s happening is reflected on the level of engagement.”

He added: “In bridging that particular gap, we need to move forward. The suffering (in Gaza) has gone on for far too long. No one, unless you’re directly impacted, can comprehend the pain and suffering.

“It’s important at this time that our conversations are frank and candid, and when we have differing perspectives, (remember) that ultimately, the goal that we all want to see is peace in the Middle East.

“If we don’t address that central, pivotal issue, we won’t see progress and we’ll be back here again.”

Saudi Cabinet approves establishment of national minerals program

Saudi Cabinet approves establishment of national minerals program
Updated 8 sec ago

Saudi Cabinet approves establishment of national minerals program

Saudi Cabinet approves establishment of national minerals program

RIYADH: Saudi Arabia is set to launch a new national minerals program, further strengthening its position as a regional and global center for the mining and metals sector.
The Saudi Cabinet has approved the establishment of the initiative, which is set to be linked to the Kingdom’s Ministry of Industry and Mineral Resources, according to a statement. 
The newly announced program is expected to meet the growing local, regional, and global needs for minerals, build local capabilities, and contribute to exploration operations.
This is in line with Saudi Arabia’s ambition to transform mining into a foundational industrial pillar of the country’s economy. It also aligns with the ministry’s goal to further bolster the sector and contribute to ongoing developments under Saudi Vision 2030.
According to a ministry statement released earlier this year, the Kingdom’s mineral wealth is valued at an estimated SR9.4 trillion ($2.5 trillion).
Minister of Industry and Mineral Resources Bandar Alkhorayef thanked King Salman and Crown Prince Mohammed bin Salman following the cabinet’s approval, and said the program will play an effective role in driving growth paths in the minerals sector and exploiting the Kingdom’s mineral wealth.
“The Council of Ministers’ decision to establish the National Minerals Program will constitute a qualitative shift in supporting supply chains in the industrial and mining sectors and strengthen the Kingdom’s position as a regional and global center for the mining and minerals sector,” Alkhorayef said in a statement.

“The Kingdom’s directions aim to develop mineral value chains so that the mining sector becomes the third pillar of the national industry, and to benefit from the Kingdom’s geographical location, which represents one of the most important major trade intersections,” he also said.

Saudi weekly POS spending hits $3bn, driven by hotel sector surge

Saudi weekly POS spending hits $3bn, driven by hotel sector surge
Updated 30 sec ago

Saudi weekly POS spending hits $3bn, driven by hotel sector surge

Saudi weekly POS spending hits $3bn, driven by hotel sector surge
  • Payments in restaurants and cafe held the largest share of POS transactions

RIYADH: Saudi Arabia’s point-of-sale spending totaled SR11.9 billion ($3.19 billion) from July 7 to 13, driven by a 3.8 percent weekly surge in hotel sector transactions, official data showed.

The latest data from the Saudi Central Bank, also known as SAMA, revealed that the hospitality industry showed the only increase during the week, with total transaction values reaching SR269.6 million. 

Point-of-sale is where transactions between merchants and customers take place, using systems like cash registers or digital terminals to manage sales and payments. 

Saudi Arabia’s apex bank releases weekly POS data to provide insights into consumer spending patterns, economic activity, and trends in various sectors such as retail, hospitality, and services. 

During the seven-day period starting July 7, POS transactions in the Kingdom declined by 9.8 percent, reversing from an increase in the previous week, to reach SR13.2 billion.  

Data from SAMA indicated that payments in restaurants and cafes decreased by 6.4 percent compared to the previous week, totaling SR1.84 billion, while still holding the largest share of POS transactions. 

Expenses on food and beverages dipped by 12.5 percent to reach SR1.79 billion, the third-largest fall compared to the previous week.  

Miscellaneous goods and services came in third place in spending size, recording an 11.2 percent dip, reaching SR1.57 billion. 

Gas stations witnessed the smallest dip this week, recording a 3.2 percent decrease, reaching SR841.4 million.  

Construction and building materials experienced the second-smallest drop in POS transaction value, diminished by 4.7 percent to SR329.7 million. Furthermore, expenses on transportation witnessed the third-smallest surge, with a 5.6 percent decrease, reaching SR733.1 million. 

According to data from SAMA, 33.37 percent of POS deals occurred in Riyadh, with the total transaction value reaching SR3.91 billion, representing an 8.3 percent decline from the previous week when it was SR4.26 billion. 

Riyadh has expanded into a major growth hub, with Spinneys recently debuting its flagship 43,520 sq. ft. outlet at La Strada Yard, marking the start of its expansion in the capital and Jeddah to meet the increasing demand for high-quality groceries in Saudi Arabia.  

In Jeddah, purchases accounted for 14.6 percent of the total, amounting to SR1.71 billion, reflecting an 8 percent weekly decrease, the third-largest decline compared to the previous week.  

Expenditures in Abha and Makkah declined by 4.8 percent and 4.2 percent, reaching SR224.2 million and SR459.5 million, respectively. 

The highest fall was spotted in Tabouk with a 12.8 percent weekly change, reaching SR216.2 million. 

Saudi Arabia’s crude exports up 2.51 % to 6.12m bpd: JODI data

Saudi Arabia’s crude exports up 2.51 % to 6.12m bpd: JODI data
Updated 11 min 8 sec ago

Saudi Arabia’s crude exports up 2.51 % to 6.12m bpd: JODI data

Saudi Arabia’s crude exports up 2.51 % to 6.12m bpd: JODI data

RIYADH: Saudi Arabia’s crude exports rose to 6.12 million barrels per day in May – up 2.51 percent compared to the previous month, data from the Joint Organizations Data Initiative revealed.

Data also indicated that the Kingdom’s crude production increased to 8.99 million bpd, reflecting a monthly rise of 0.08 percent.

Refinery crude output, representing the processed volume of crude oil yielding gasoline, diesel, jet fuel, and heating oil, surged to an almost six-year high. It increased by 17 percent compared to the previous month, reaching 3.026 million bpd, according to JODI data.

This also marked a 16 percent increase from the 2.61 million bpd recorded during the same month in 2023.

Exports for refinery oil products reached 1.22 million bpd, a 13 percent decline compared to the previous month.

The data revealed Saudi demand for petroleum products rose by 75,000 bpd to 2.355 million bpd.

As one of the world’s leading oil producers, Saudi Arabia plays a crucial role in supplying these refined products to meet global energy demands.

OPEC and its allies, known as OPEC+, agreed in June to extend most of its substantial oil output cuts into 2024, with plans to gradually phase them out in 2025.

This decision aims to support the market amid sluggish global demand growth, high interest rates, and increasing US production.

OPEC+ has implemented several deep output cuts since late 2022. The countries participating in the second round of voluntary cuts included Algeria, Gabon, and Kazakhstan, as well Kuwait, Oman, and Russia. Saudi Arabia, the UAE, and Iraq also took part.

When it came to the third round, all countries participated apart from Gabon.

OPEC+ also delayed the deadline for an independent assessment of its members’ production capacities from June 2024 to the end of November 2025. These figures will guide the reference production levels for 2026.

Direct crude usage

Saudi Arabia’s direct burn of crude oil, involving the utilization of oil without substantial refining processes, experienced a decrease of 2,000 bpd in May, representing a 0.5 percent decline compared to the preceding month. The total direct burn for the month amounted to 398,000 bpd.

Compared to May last year, direct crude usage decreased by 80,000 bpd, a 17 percent decline.

The Ministry of Energy aims to enhance the contributions of natural gas and renewable sources as part of the Kingdom’s goal to achieve an optimal, highly efficient, and cost-effective energy mix.

This involves replacing liquid fuel with natural gas and integrating renewables to constitute approximately 50 percent of the electricity production energy mix by 2030.

Saudi economic growth to outstrip global average in 2025: IMF

Saudi economic growth to outstrip global average in 2025: IMF
Updated 49 min 25 sec ago

Saudi economic growth to outstrip global average in 2025: IMF

Saudi economic growth to outstrip global average in 2025: IMF
  • Global economy is in a “sticky spot,” according to the IMF

RIYADH: Saudi Arabia’s economic growth is expected to outpace the global average in 2025 according to the latest International Monetary Fund study.

The IMF’s World Economic Outlook update puts the Kingdom’s output increase at 4.7 percent next year – above the 3.3 percent forecast for the planet as a whole.

The figure for Saudi Arabia is down from an estimate released in April which anticipated a 6 percent growth rate for 2025.

The IMF also scaled back its 2024 projection for the Kingdom, shifting from 2.6 percent in its earlier forecast to 1.7 percent in its most recent report.

The Washington-based institution described the global economy as being in a “sticky spot,” although it maintained its earlier calculation that worldwide output would increase at a rate of 3.2 percent in 2024 and 3.3 percent in 2025.

“The growth forecast for 2024 in Saudi Arabia has been revised downward by 0.9 percentage point; the adjustment reflects mainly the extension of oil production cuts,” the IMF said. 

“Varied momentum in activity at the turn of the year has somewhat narrowed the output divergence across economies as cyclical factors wane and activity becomes better aligned with its potential. Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalization,” the July update stated.

The IMF added: “Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty. To manage these risks and preserve growth, the policy mix should be sequenced carefully to achieve price stability and replenish diminished buffers.”

Global economic snapshot: divergent paths ahead

Across major economies, contrasting trends defined economic forecasts heading into 2024 and beyond.

Earlier in the year, the US confronted a sharper-than-anticipated slowdown, driven by easing consumer spending and adverse net trade dynamics. 

Growth projections for 2024 have been revised to 2.6 percent, 0.1 percentage point lower than projected in April, with expectations for 2025 further declining to 1.9 percent.

Tightening fiscal policies and cooling labor markets are poised to exert further pressure. Inflation remains stubborn, particularly in services, delaying potential monetary policy adjustments. Therefore, it is lagging behind other advanced economies in easing measures.

Europe’s recovery hinges on robust performances in the services sector, with growth expected to reach 0.9 percent in 2024, rising to 1.5 percent in 2025. 

Strengthened consumer demand, bolstered by higher real wages and improved financing conditions, supports this optimistic outlook. However, persistent weaknesses in manufacturing, notably in Germany, suggest a nuanced recovery across sectors.

China’s economy continues to exhibit resilience, with a revised growth forecast of 5 percent for 2024, driven by a resurgence in domestic consumption and robust export performance. 

Yet expansion is anticipated to moderate to 4.5 percent in 2025 and beyond as the country grapples with demographic shifts and slowing productivity gains.

Emerging markets and developing economies are projected to grow by 4.3 percent in 2024, driven by a strong performance in Asia, particularly China and India. 

India’s growth forecast has been revised upward to 7 percent for 2024, higher than April’s projection of 6.8 percent reflecting improved private consumption and positive carryover effects from 2023.  

The UK anticipates modest growth of 0.7 percent in 2024, expanding to 1.5 percent in 2025. Economic prospects are shaped by ongoing fiscal restraint and residual impacts of earlier inflationary pressures on consumer and investment activities.

Japan’s revised growth forecast for 2024 is 0.7 percent from 0.9 percent in April, influenced by transient supply disruptions and subdued private investment.

Nevertheless, robust wage settlements are anticipated to fuel a resurgence in private consumption by the latter half of the year.

Regional impact and global trade

The IMF report noted that oil production and regional conflicts continue to weigh heavily on economic prospects in the Middle East and Central Asia. 

Alongside Saudi Arabia, Sudan’s economic outlook has been markedly revised downward due to persistent conflict. 

Conversely, there have been upward revisions in other regions, such as Brazil, where reconstruction efforts buoy growth prospects following recent flooding and structural factors like increased hydrocarbon production.

“World trade growth is expected to recover to about 3.25 percent annually in 2024–25 and align with global GDP growth again,” the IMF added. 

The initial increase seen in the first quarter of this year is likely to slow down due to ongoing subdued manufacturing activity. 

Despite a notable rise in cross-border trade restrictions affecting it between distant geopolitical blocs, projections suggest that the global trade-to-GDP ratio will remain stable.

Inflation and monetary policy

Global disinflation efforts are facing headwinds, with services price inflation complicating monetary policy normalization. 

The report highlighted the persistence of higher-than-average inflation in services costs, which has tempered the disinflation in goods prices.

“The revised forecast for advanced economies is for the pace of disinflation to slow in 2024 and 2025. That is because inflation in prices for services is now expected to be more persistent and commodity prices higher,” the international organization said.

It added that the gradual cooling of labor markets and an expected decline in energy costs should bring headline inflation back to target by the end of 2025. 

Price increases are anticipated to persist at elevated levels in emerging markets and developing economies, falling more gradually compared to advanced countries.

Due in part to declining energy costs, inflation has nearly returned to pre-pandemic levels for the typical emerging market and developing economy.

Egypt’s exports rise 0.8% in April, reaching $3.3bn 

Egypt’s exports rise 0.8% in April, reaching $3.3bn 
Updated 17 July 2024

Egypt’s exports rise 0.8% in April, reaching $3.3bn 

Egypt’s exports rise 0.8% in April, reaching $3.3bn 

RIYADH: Egypt’s petroleum, clothing, pastes, and food preparation exports led the country to a 0.8 percent year-on-year increase in foreign trade for April, reaching approximately $3.3 billion, according to official data. 

The rise contributed to a 2.5 percent narrowing of the nation’s trade deficit, which stood at around $2.7 billion for the same period, as reported by Egypt’s Central Agency for Public Mobilization and Statistics. 

The sectors showing significant growth included petroleum products, which saw a 16.3 percent increase, ready-made garments, which rose 31.4 percent, and pastes and food preparations, which surged by 45 percent. 

Additionally, pharmaceuticals and pharmacy products experienced an increase of 64 percent. 

The rise in exports in April came after Egypt saw its current account deficit widen significantly in the first nine months of the fiscal year 2023-2024, which ended on June 30. 

The deficit reached $17.1 billion, compared to $5.3 billion in the corresponding period of the previous year, according to the latest figures from the Central Bank of Egypt.

This performance was driven by the shift of the oil-trade balance into a deficit of $5.1 billion from a surplus of $1.7 billion. The CBE attributed this change to the decline in the value of oil exports, outpacing the decrease in oil imports. 

The nation aims to turn its economy around by bolstering exports across all sectors to diverse global markets.

This effort emphasizes collaboration between government entities, business communities, and Egyptian exporters to enhance product quality and competitiveness. 

This also supports Egypt’s target of achieving $100 billion in annual merchandise exports in the next three years to defuse its trade deficit. 

The value of exports for some commodities decreased in April, including fresh fruits by 6 percent, fertilizers by 35.6 percent, primary forms of plastics by 4 percent, and crude oil by a substantial 67.6 percent. 

On the import side, the overall value saw a slight decline of 0.7 percent, amounting to $5.97 billion. Egypt’s Central Agency for Public Mobilization and Statistics attributed this decrease to a reduction in the value of imports for several key goods. 

Primary forms of plastics saw an 11.4 percent price reduction, while organic and inorganic chemicals dropped 17.4 percent, pharmaceuticals and pharmacy preparations fell 9.4 percent, and corn imports plummeted 33.1 percent. 

Imports of other commodities experienced significant increases, including imports of petroleum products, which surged by 32.5 percent, wheat by 45.2 percent, primary iron or steel materials by 28.6 percent, and natural gas by 30.7 percent.