UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion

UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion
The Central Bank of the UAE expects the country’s GDP to grow by 4 percent in 2024 (File/Getty)
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Updated 26 September 2024
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UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion

UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion

RIYADH: The UAE’s central bank has revised up its forecast for the country’s GDP growth in 2024 by 0.1 percentage points in light of expected improvements in the oil sector.

The institution had originally slated 3.9 percent growth for the 12-month period, but is now projecting an expansion of 4 percent.

In its second-quarter economic report, the bank maintained its 2025 growth forecast at 6 percent.

The analysis predicted that the non-hydrocarbon sector will grow by 5.2 percent in 2024, rising to 5.3 percent in 2025, while the hydrocarbon division is expected to see a modest 0.7 percent growth this year, increasing to 7.7 percent in 2025.

The report said: “Growth forecasts continue to be driven by tourism, transportation, financial and insurance services, construction and real estate, and communications sectors; while the current levels of oil production during 2024 partially moderate the overall growth.”

The central bank anticipated strong momentum in the hydrocarbon sector in 2025, with significant production increases. Additionally, it underlined that a rapid decline in interest rates in major advanced economies could boost global demand and encourage capital flows into emerging markets, including the UAE.

The report also revealed that non-hydrocarbon GDP growth stood at 4 percent year-on-year in the first quarter of 2024, down from 6.7 percent in the previous quarter, mainly due to a slowdown in financial and insurance services, real estate activities, construction and manufacturing.

However, the report said that “non-hydrocarbon GDP growth is expected to remain strong at 5.2 percent in 2024 and 5.3 percent in 2025,” mainly driven by strategic plans and policies that the government has undertaken to attract foreign investments and the ongoing structural reforms.

The fiscal balance for the first quarter of the year remained positive at 23.5 billion Emirati dirhams ($6.39 billion), or 4.9 percent of GDP, compared to 23.2 billion dirhams, or 5.1 percent of GDP, in the first quarter of 2023.

The UAE’s consolidated budget revenues grew by 4.3 percent year-on-year in the first quarter to 120.6 billion dirhams, or 24.9 percent of GDP, driven primarily by a 32.5 percent annual increase in tax revenues.

The central bank highlighted that the UAE’s fiscal stability is improving, with tax revenues making up an increasing share of total revenues — rising from 45.8 percent in the first quarter of 2022 to 70 percent in the first quarter of 2024 — mainly due to the recent introduction of corporate taxes.

The report also detailed government spending in the first quarter, saying: “Government expenditure in the first quarter of 2024 totaled 97.1 billion dirhams, or 20 percent of GDP, reflecting a 5 percent year-on-year increase.”

Key spending categories, including employee compensation, goods and services, and social benefits, rose by 6.3 percent, 15.2 percent, and 3.4 percent, respectively. Capital expenditures also saw a significant rise, increasing more than sevenfold to 5.6 billion dirhams.

The Central Bank of the UAE pointed to signs of expansion in the private non-oil sector, with the country’s purchasing managers’ index reaching 53.7 in July, reflecting sustained business confidence. 

Employment data showed that the number of workers covered by the Wage Protection System remained stable year-on-year in June, while average monthly wages increased by 4.8 percent. 

“The 16 non-oil sectors continued their robust growth pattern in Q2 2024, albeit at a more moderate rate,” the report added.

Wholesale and retail trade, manufacturing, and construction remained key pillars of non-oil sector expansion. 

Various comprehensive economic partnership agreements and visa-related initiatives have boosted trade volumes and transactions, while the manufacturing sector “continued to attract greater levels of FDI (foreign direct investment), expanding in line with Operation 300 billion.”

The construction sector also advanced, with numerous new infrastructure projects underway, including Etihad Rail and the Port of Dubai Creek.


Saudi oil giant Aramco launches first branded gas station in Pakistan

Saudi oil giant Aramco launches first branded gas station in Pakistan
Updated 30 October 2024
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Saudi oil giant Aramco launches first branded gas station in Pakistan

Saudi oil giant Aramco launches first branded gas station in Pakistan

KARACHI/ISLAMABAD: Saudi oil giant, Aramco, on Tuesday unveiled its first branded retail gas station in Pakistan in the eastern city of Lahore, months after its acquisition of a 40 percent stake in Gas & Oil Pakistan Ltd. petroleum company.

Aramco is a global integrated energy and chemicals company that produces approximately one in every eight barrels of the world’s oil supply. GO, one of Pakistan’s largest retail and storage companies, is involved in the procurement, storage, sale and marketing of petroleum products and lubricants.

The Aramco-branded stations in Pakistan will offer branded premium fuel, high-quality lubricants, professional automotive services and modern convenience stores to provide a seamless customer experience, according to a statement shared by Corporate and Marketing Communications, which handles Go and Aramco’s public relations in Pakistan.

“This is another milestone in Aramco’s downstream growth story, as we launch the first Aramco station in Pakistan — a market with significant growth potential,” Yasser M. Mufti, Aramco executive vice president of products and customers, was quoted as saying by the CMC.

“Our values of excellence, innovation and community partnerships sit at the heart of what we do, and will act as our guide as we leverage our extensive global refinery systems to ensure reliable supplies to customers while introducing our complementary world class retail offerings.”

Together with GO, which has a network of over 1,200 fuel retail stations in Pakistan, Aramco plans to expand its retail network and establish a presence in the fast-growing Pakistani economy.

“We are confident that this partnership will deliver exceptional value to customers,” Mufti said.

Khalid Riaz, the GO chief executive officer, echoed the sentiment, saying the first Aramco-branded gas station in Lahore was a testament to their commitment to excellence and innovation.

“Together with Aramco, we aim to elevate the retail fuel landscape in Pakistan, setting new benchmarks for quality, service, and customer satisfaction,” he said.

Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top source of remittances to the cash-strapped South Asian nation.

In February 2019, Pakistan and Saudi Arabia inked investment deals totaling $21 billion during a visit by Saudi Crown Prince Mohammed bin Salman to Islamabad. The agreements included about $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex at the strategic Gwadar Port in Pakistan’s Balochistan province.

Both countries have been working in recent months to increase bilateral trade and investment, and the Kingdom this year reaffirmed its commitment to expedite an investment package worth $5 billion for Pakistan.


Saudi-Pakistan business deals enhanced to $2.8bn, says Al-Falih

Saudi-Pakistan business deals enhanced to $2.8bn, says Al-Falih
Updated 30 October 2024
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Saudi-Pakistan business deals enhanced to $2.8bn, says Al-Falih

Saudi-Pakistan business deals enhanced to $2.8bn, says Al-Falih

ISLAMABAD: Saudi Minister for Investment Khalid Al-Falih said on Wednesday $2.2 billion in agreements and memorandums of understanding signed between Saudi and Pakistani businesses earlier this month had been enhanced to $2.8 billion.

The business-to-business collaborations were signed on Oct. 10 during Al-Falih’s visit to Islamabad with a delegation of top investors and entrepreneurs from the Kingdom.

Pakistani Prime Minister Shehbaz Sharif is currently on a two-day visit to Riyadh where he attended the Future Investment Initiative forum on Tuesday and also held a bilateral meeting with Saudi Crown Prince Mohammed bin Salman who earlier this year reaffirmed the Kingdom’s commitment to expedite a $5 billion investment package for Pakistan.

“When we came to Pakistan, we concluded in three days 27 MoUs valued at $2.2 billion,” Al-Falih said in a televised press talk with Sharif. 

“And I mentioned during that time at various events that this was only the beginning. To prove that, here we are two or three weeks later, and I would like that that number has increased from 27 MoUs and agreements to 34 MoUs.

“So, we have been able to add another seven, almost two per week. And I think more importantly, the value of those agreements has also increased to $2.8 billion.”

The Saudi minister said five agreements signed during his trip to Pakistan were already operational and had resulted in exports from the South Asian state to the Kingdom. Al-Falih said Saudi Arabia would also absorb a greater and more qualified Pakistani workforce, especially in the health sector, in the foreseeable future.

“Remittances back to Pakistan will be on the rise,” the official said. “The first results will be seen in the next few weeks.”

Al-Falih said Saudi Arabia would also seek help from Pakistani technology firms to transform the way digital artificial intelligence was used for business and the economy.

Sharif thanked the Saudi government, especially Crown Prince Mohammed, for helping Pakistan secure a $7 billion International Monetary Fund program last month by helping Islamabad meet its external financing needs.

The PM added that he planned to return to Saudi Arabia next month for more discussions on bilateral engagements.

“Together we are marching forward, together we are strengthening our brotherly relations,” he said.

The Pakistani PM’s visit takes place at a time when Islamabad is seeking to strengthen trade and investment ties with friendly nations, particularly the Kingdom, which has promised a $5 billion investment package that cash-strapped Pakistan desperately needs to shore up its dwindling foreign reserves and fight a chronic balance of payment crisis.


Saudi Arabia emerges as a key destination for global finance, says top banker

Saudi Arabia emerges as a key destination for global finance, says top banker
Updated 30 October 2024
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Saudi Arabia emerges as a key destination for global finance, says top banker

Saudi Arabia emerges as a key destination for global finance, says top banker

RIYADH: Saudi Arabia is emerging as a hub for global finance and investment, according to a Standard Chartered Bank official.

In an interview with Arab News at the Future Investment Initiative in Riyadh, Rola Abu Manneh, CEO of Standard Chartered Bank for the Middle East, UAE, and Pakistan, emphasized the significance of FII as a platform uniting key financial players. She mentioned that attendance has grown from 7,000 in 2023 to around 9,000 in 2024.

“You could see it’s able to attract the fund managers, the bankers, the credit agencies, as well as the Saudi ink. It’s a platform where you meet all the Saudi ink. You learn about what investment Saudi requires. What are their plans in terms of expansion,” she said.

Discussing the Kingdom’s infrastructure and growth initiatives, Abu Manneh highlighted the appeal for contractors, banks, and export credit agencies to collaborate on significant projects like the Red Sea initiative.

“This is where you would have the contractors, the ECAs, and the banks coming in together to put facilities in place,” she added.

Saudi Arabia’s Public Investment Fund and Aramco are also generating interest from equity and debt investors worldwide, driven by their expansion and monetization strategies. “From that angle, there’s opportunity for everybody for equity, for the investments as well as for the debt,” Abu Manneh explained.

She stressed the need for Saudi entities to diversify their funding sources, especially as the Kingdom develops its infrastructure. “It’s very important for them, the Saudi ink, to diversify their funding base and not rely only on the debt capital market,” she explained.

Abu Manneh noted that China has shown significant interest in Saudi projects. “China is looking to come and invest in the Saudi markets,” she said, adding that Chinese companies and banks are keen to establish a presence in the Kingdom.

The bank is pursuing its digital transformation to adapt to changing customer expectations, with substantial investments in AI (artificial intelligence) and digitization. “Because if we don’t do this, frankly, all banks will just disappear,” Abu Manneh remarked.

She added that while AI could enhance customer service and documentation processes, it won't fully replace human interaction, particularly in private banking.


Saudi Arabia launches digital platform to aid ocean health monitoring

Saudi Arabia launches digital platform to aid ocean health monitoring
Updated 30 October 2024
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Saudi Arabia launches digital platform to aid ocean health monitoring

Saudi Arabia launches digital platform to aid ocean health monitoring

RIYADH: Saudi Arabia has unveiled Ocean Central, a first-of-its-kind digital platform offering a view of marine health to aid global regeneration efforts. 

The platform, revealed at the Future Investment Initiative by the Kingdom’s Ambassador to the US Princess Reema bint Bandar, was developed in partnership with Wave to integrate data, design, storytelling, and strategy into accessible insights. 

Ocean Central allows users worldwide to understand health trends of the sea, identify data gaps, and work toward comprehensive restoration.

Princess Reema highlighted the need for shared understanding and collaboration to achieve ambitious ocean regeneration goals. 

“Countries are setting ambitious targets to regenerate a thriving ocean, but what’s been missing is a clear view of the journey,” she said. 

The ambassador continued: “By working together and leveraging data, Ocean Central will act as a catalyst for ocean regeneration by highlighting successful initiatives, identifying gaps in ocean data, and building a shared understanding of the ocean.”

The platform aligns with global objectives, integrating targets from the UN Sustainable Development Goals, the Kunming-Montreal Global Biodiversity Framework, and the 2015 Paris Agreement, to track both 2030 and 2050 milestones toward a regenerated ocean. 

It facilitates the collection and analysis of data on marine biodiversity, coastal preservation, and other key areas to drive informed action.

Princess Reema called for global collaboration, urging individuals, scientific communities, and industries to unite in the endeavor. 

“Together, we can build a collective understanding of ocean health and ensure a thriving ocean by 2050.” she said.

In a panel discussion alongside Red Sea Global CEO John Pagano, Princess Reema said: “We all know that the health of our planet and our oceans and our ecosystems are all connected to our well-being.”

She said the ocean-related industries generate over $2.5 trillion economic value per year globally, supporting the livelihoods of 3 billion people in industries that include seafood, port construction, and coastal tourism.

The Saudi envoy reiterated that economies can grow “but not at the expense of the ocean,” adding that “the investment in the blue economy has a trifecta of positive impact.”

 She added: “This collaboration of well-being and economic investment in coastal communities really can be considered as part of the toolkit that can restore the damage that has been done to oceans. You don't have to have it separated. It's all one and the same.”

Pagano emphasized: “I think we've taken our oceans far too for far too long, for granted.”

 


Riyadh Air orders 60 next-generation Airbus A321 aircraft

Riyadh Air orders 60 next-generation Airbus A321 aircraft
Updated 30 October 2024
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Riyadh Air orders 60 next-generation Airbus A321 aircraft

Riyadh Air orders 60 next-generation Airbus A321 aircraft
  • Strengthening the operations of Riyadh Air is crucial for Saudi Arabia as the Kingdom is evolving itself as a global tourism destination
  • New order will also support the airline’s long-term goal of creating 200,000 jobs and delivering enhanced connectivity

RIYADH: Saudi Arabia’s Riyadh Air, a subsidiary of the Public Investment Fund, has signed an agreement to purchase 60 Airbus A321neo single-aisle aircraft, as it plans to commence its operations in 2025. 

According to a press statement, the deal was signed by Tony Douglas, CEO of Riyadh Air, and Christian Scherer, CEO of Commercial Aircraft of Airbus, at the 8th Future Investment Initiative in the Kingdom’s capital city.  

Strengthening the operations of Riyadh Air is crucial for Saudi Arabia as the Kingdom is evolving as a global tourism destination, aligned with the economic diversification goals outlined in the Vision 2030 program. 

In September, the airline launched its first non-commercial flight from Riyadh’s King Khalid International Airport as part of the certification process.

Last year, the airlines had ordered 39 Boeing 787 Dreamliners with options for 33 more, thus bringing the estimated fleet capacity to 132.

The Airbus A321neo airliner is widely considered the most sustainable and efficient aircraft in the aviation industry. AN/Abdulrahman bin Shalhuob

“We are pleased to embark on another key milestone in Riyadh Air’s journey with the carrier’s second major fleet order, this time in partnership with Airbus,” said Yasir Al-Rumayyan, governor of PIF and chairman of Riyadh Air. 

He added: “This deal underlines the airline’s ambitious intentions in advance of next year’s launch as it builds a comprehensive international network and establishes Riyadh as a major strategic global aviation hub.”

The Airbus A321neo airliner is widely considered the most sustainable and efficient aircraft in the aviation industry, and it is expected to fulfill Riyadh Air’s ambition to cover 100 destinations worldwide by the end of this decade, the press statement said. 

Riyadh Air added that the new order will also support the airline’s long-term goal of creating 200,000 jobs and delivering enhanced connectivity to Riyadh to the world. 

“This order will not only enable us to support economic growth in the aviation industry, it will also ensure Riyadh Air operates one of the most sustainable fleets in the industry and be instrumental in helping Saudi Arabia achieve its net-zero emissions goals,” said the CEO of Riyadh Air. 

Douglas added: “This deal strongly reinforces the positive economic impact of Saudi Arabia’s newest airline on both a global and local scale and helps facilitate the fast-growing local aviation ecosystem.” 

The chief of Commercial Aircraft at Airbus said that the latest generation A321neo aircraft will bring exceptional efficiency to Riyadh Air’s operations and comfort to its passengers. 

“We look forward to working together to support the incredible growth of Saudi aviation,” added Scherer.