WTO slashes global trade growth forecast; US consumer prices accelerate — Macro Snapshot

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Updated 12 April 2022
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WTO slashes global trade growth forecast; US consumer prices accelerate — Macro Snapshot

RIYADH: The impact of the Russia-Ukraine war peaked US consumer price levels last month, as cost of gasoline was pushed to record highs, shrank Britain’s earnings despite unemployment falling to its lowest in 50 years, and led to a revision of the World Trade Organization’s global growth forecasts from 4.7 to 3 percent this year.  

India’s retail inflation accelerated to its highest in 17 months, and Argentina’s inflation is expected to increase to its highest growth this year. Sri Lanka temporarily suspended foreign debt payments and Chinese export growth likely slowed, whereas Australia’s business conditions picked up in March. 

India’s retail inflation 

India’s retail inflation accelerated to near 7 percent year-on-year in March, its highest in 17 months and above the upper limit of the central bank’s tolerance band for a third straight month, putting pressure on it to raise policy rates.

Annual consumer price-based inflation in March touched 6.95 percent, pushed by rising prices of fuel products and some food items. The print was higher than the 6.35 percent year-on-year forecast by economists in a Reuters poll, and 6.07 percent in the previous month.

Argentina’s March inflation

Argentina’s inflation rate in March will surpass 6 percent to reach the highest monthly growth in consumer prices so far this year, the economy minister said on Monday, as the country struggles with an extended period of surging costs for many goods and services.

“The (consumer price) index is going to exceed 6 percent, it will be the highest of the year,” Economy Minister Martin Guzman said, during an interview with local broadcaster C5N. He added that international market pressures were also weighing on the South American country’s rising prices.

Annual inflation this year is seen at around 60 percent, according to the bank.

US consumer prices 

US monthly consumer prices increased by the most in 16-1/2 years in March as Russia’s war against Ukraine boosted the cost of gasoline to record highs, cementing the case for a 50 basis points interest rate hike from the Federal Reserve next month.

The consumer price index surged 1.2 percent last month, the biggest monthly gain since September 2005, the Labor Department said on Tuesday. The CPI advanced 0.8 percent in February.

WTO slashes growth forecast 

The World Trade Organization on Tuesday revised down its forecast for global trade growth this year, to 3 percent from 4.7 percent because of the impact of the Russia-Ukraine war, and warned of a potential food crisis caused by surging prices.

The report from the global trade watchdog said the conflict, now in its seventh week, had damaged the world economy at a critical juncture as the coronavirus pandemic — and Chinese lockdowns specifically — continues to weigh on the recovery.

“The economic reverberations of this conflict will extend far beyond Ukraine’s borders,” WTO Director-General Ngozi Okonjo-Iweala told a news conference presenting the findings.

UK jobless rate lowest since 2019

Britons’ earnings shrank by the most since 2013 in February, when adjusted for surging inflation, despite unemployment falling to its joint lowest in almost 50 years, highlighting the challenges facing the Bank of England.

The jobless rate sank to 3.8 percent in the three months to February from 3.9 percent before, official figures showed, matching a rate last seen in late 2019 and one that has not been lower since 1974.

Annual growth in average earnings excluding bonuses picked up to 4 percent from 3.8 percent, but fell short of rising inflation — which hit 6.2 percent in February — and led to a 1.3 percent drop in its real value, the Office for National Statistics said.

“Soaring inflation is casting a big shadow over an otherwise buoyant labor market,” Nye Cominetti, an economist at the Resolution Foundation think tank, said.

Sri Lanka suspends debt payments

Sri Lanka will temporarily suspend foreign debt payments to avoid a hard default, the central bank governor said on Tuesday, with its limited foreign reserves required for imports of essential items such as fuel.

“It has come to a point that making debt payments are challenging and impossible. The best action that can be taken is to restructure debt and avoid a hard default,” Gov. P. Nandalal Weerasinghe told reporters.

Sri Lanka is due to start talks with the International Monetary Fund on a loan program next week, with the country suffering from prolonged power cuts alongside shortages of food and medicines.

China’s trade growth 

China’s export growth likely slowed in March as the Ukraine war inhibited global demand, while imports probably eased amid signs that widespread anti-COVID lockdowns have weakened domestic consumption, a Reuters poll showed on Tuesday.

Exports likely rose 13 percent in March, versus a year earlier, compared with 16.3 percent year-on-year growth for the January-February period, according to a median forecast in a Reuters poll of 19 economists.

Imports in March were estimated as 8 percent higher than a year before, the poll showed, easing from 15.5 percent growth seen in the first two months of the year. The slowdown in growth was partly driven by sluggish domestic demand and by production disruptions, both caused by ongoing COVID-19 outbreaks, analysts say.

Chinese economic data for January and February is often combined to remove distortions caused by the shifting timing of the Lunar New Year holiday.

Economists in the poll expect a March trade surplus of $22.4 billion, compared with $13.8 billion a year earlier.

The trade data will be released on Wednesday.

Australia business conditions 

 A measure of Australian business conditions picked up sharply in March as firms saw strong sales and labor conditions, while surging costs pushed retail prices higher in a worrying sign for inflation.

Tuesday’s survey from National Australia Bank showed its index of business conditions doubled to +18 in March, while confidence added 3 points to +16.

The upbeat result will likely be welcomed by Prime Minister Scott Morrison, who is in the middle of a tough election campaign.

Inflation expectations stayed high at 5.8 percent, reflecting cost of living pressures from petrol, food and housing.

All that price froth has yet to deter shoppers, with CBA’s measure of household spending intentions jumping 9.2 percent in March to a record high, led by travel, transport and retail.

The strength in spending, combined with a 13-year low for unemployment, suggests the economy overall put in a solid performance in the first quarter.

 

 


Speed of Saudi innovation ‘wowing’ UK, says British trade campaign executive

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Speed of Saudi innovation ‘wowing’ UK, says British trade campaign executive

RIYADH: UK delegates at the GREAT Futures Initiative Conference have been “wowed” by Saudi Arabia's business landscape, according to a senior British trade executive. 

Speaking during an interview with Arab News, Kate Taylor Tett, director of the GREAT Britain and Northern Ireland Campaign, noted that the event served as a catalyst for change and progress by facilitating cross-sectoral collaboration and dialogue between counterparts from both nations.

She also stressed the fast pace of innovation observed in Saudi Arabia, which has left a strong impression.

“I think what this event has done is put Saudi right at the top of that list. So at the moment, you know, Saudi is the 24th biggest trading partner for the UK,” Tett said.

She added: “I think this top event will really accelerate that because people see it as an opportunity that they need to address right now, not at some point in the future, and hopefully that’s really exciting for businesses.”

Tett also stated that the event attendees were impressed by what they experienced in Saudi Arabia, which led to a shift in their opinions about the market.

“I haven’t spoken to a single person at this event who hasn’t been wowed by what they’ve seen when they’ve come here. I think their opinions have shifted, and that in itself is a huge opportunity,” she said.

Tett also explained that the event is not just a two-day gathering; it is a program that extends over a year and involves various collaborations between UK businesses and counterparts in Saudi Arabia. 

“I know there’ll be lots of sort of cross-fertilization in that way, so this, these two days are very much a catalyst for initially a year-long program. But I think what you’ll see is that then that becomes a leap pad for things beyond that,” she said.

Commenting on the UK-Saudi partnerships, Tett emphasized the significance of innovation in collaboration between countries that are actively engaged in progressive undertakings.

She also stressed the fast pace of innovation observed in Saudi Arabia, which has left a strong impression.

“Everybody I’ve spoken to here has just been wowed by the pace of innovation in Saudi. And clearly bringing that innovation together and companies working together just creates these huge opportunities which have an economic benefit on both sides of the partnership,” Tett underscored.

She added: “I think what really hit me has been the energy and the positivity of everybody that I’ve met. I spent some time working in the world of startups, and I think Saudi feels like a huge startup. Everything feels possible.”

She concluded by expressing her enthusiasm among the participants and describing their collective drive to make progress as “really infectious.”


Saudi property forum to enhance local real estate supply chain access

Updated 36 min 49 sec ago
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Saudi property forum to enhance local real estate supply chain access

RIYADH: Saudi real estate firms are poised to gain improved access to the supply chain with major industry players set to gather in Riyadh for an event designed to enhance cooperation and forge partnerships.

Under the patronage of the Minister of Municipal and Rural Affairs and Housing Majid bin Abdullah Al-Hogail, the National Housing Co. will host the Real Estate Supply Chain Forum from May 20 to 21 at the JW Marriot Hotel Riyadh, with the aim of fostering the growth of the property sector.

The event will gather a diverse array of local and international companies, consultants, contractors, and manufacturers to explore collaborative opportunities aimed at delivering integrated housing projects focused on quality and affordability, according to the Saudi Press Agency.

The forum will also provide promising investment opportunities, facilitate the signing of investment agreements and strategic partnerships, establish new standards, and find innovative solutions for real estate development.

Additionally, the gathering will unveil the latest agreements to secure supply chains between the NHC and a range of local and global partners.

Several scheduled dialogue sessions will showcase the latest technologies in the building materials industries. These talks will facilitate the exchange of expertise between local and international companies, aiming to enhance the supply chain network.

On May 5, the NHC signed a deal with China’s leading firm, CITIC Construction Group, to establish an industrial city and logistic zones for building materials, comprising 12 factories, with the objective of securing supply chains for the NHC’s housing projects.

NHC CEO Mohammad Al-Buty finalized the deal during Al-Hogail’s official visit to China.

The NHC said the agreement with the Chinese construction group is part of its efforts to secure supply chains for its housing projects and ensure their timely completion and high quality.

The Saudi company highlighted that the deal includes the construction of 12 factories specializing in building materials, harnessing Chinese expertise, and involving local factories to uplift business standards.

It added that the agreement also aims to draw top-tier service providers across various company sectors, its subsidiaries, and other projects.

The firm pointed out that the pact is expected to maximize the economic and developmental impact of the real estate sector in the Kingdom, develop housing projects, enhance their quality, and promote national transformation in the construction sector through these industrial cities and logistic zones.


British Airways to resume Jeddah operations, enhancing UK-Saudi connectivity

Updated 55 min 56 sec ago
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British Airways to resume Jeddah operations, enhancing UK-Saudi connectivity

RIYADH: British Airways is set to resume operations in Jeddah after a five-year hiatus, aiming to enhance connectivity to the Kingdom, the airline said. 

Announced at the GREAT Futures Initiative Conference held in Riyadh, the route is scheduled to commence on Nov. 4, offering year-round service to the Saudi city from London Heathrow, according to a press release. 

The new service, operated by the Boeing 787 fleet, will total four flights per week, and sit alongside the daily operations between Riyadh and Heathrow.

Speaking at the event, Colm Lacy, British Airways’ chief commercial officer, said: “We have a long history of connecting families, friends and businesses in the Kingdom of Saudi Arabia with our home in London.” 

He added: “There are significant opportunities for businesses in both countries, so we’re pleased we can re-build our connectivity and strengthen links between the two kingdoms.”  

In a joint statement, Mazen Johar, CEO of Jeddah Airports, and Majid Khan, CEO of Saudi Air Connectivity Program, said: “The return of the UK’s flag carrier to Jeddah, with new flights from London Heathrow, will further strengthen our air connectivity from the capital.” 

They added: "With British Airways’ leading network in the UK, Europe, and onwards to North America, travelers can experience an untouched wonder, Saudi Arabia, through one of the leading global carriers, further supporting our growing inbound tourism and aviation market.”  

Earlier this week, the Kingdom’s General Authority of Civil Aviation released a statement revealing that an ambitious roadmap outlining Saudi Arabia’s tenfold growth in the aviation sector into a $2 billion industry is on track to be unveiled at the Future Aviation Forum in May. 

The plans encompass the business jet segment, including charter, private, and corporate aircraft, and aim to bolster Saudi Arabia’s development as a global high-value enterprise and tourist destination, the statement noted at the time. 

It also highlighted that the plan comes after Saudi Arabia revised its 2030 tourism target upward from 100 million to 150 million visitors in October 2023. 

Also earlier this week, the Kingdom’s Minister of Commerce announced that partnerships between Saudi Arabia and the UK encompass over 60 initiatives across 13 sectors, with trade between the countries up by a third since 2018. 

During the opening remarks of the GREAT Futures Initiative Conference, Majid Al-Qasabi noted that bilateral trade surged between 2018 and 2023, exceeding £79 billion ($99.12 billion). 

With over 1,100 active licenses for UK investors, developments such as the giga-projects in the Kingdom and policy reforms are enhancing business opportunities, the minister emphasized. 


Closing Bell: Saudi main index dips for the second consecutive day 

Updated 15 May 2024
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Closing Bell: Saudi main index dips for the second consecutive day 

RIYADH: Saudi Arabia’s Tadawul All Share Index continued its downward movement for the second consecutive day, as it shed 17.71 points to close at 12,103.20.  

The total trading turnover of the benchmark index on Wednesday was SR6.30 billion ($1.68 billion), with 128 stocks advancing and 96 declining.  

On the other hand, Nomu, the parallel market, marginally went up by 0.03 percent to 26,666.16.  

However, the MSCI Tadawul Index edged down by 0.47 percent to close at 1,512.30.  

Saudi Industrial Development Co. was the best-performing stock on the main index. The company’s share price surged by 9.95 percent to SR9.61.  

Other top performers were Wafrah for Industry and Development Co. and Al-Baha Investment and Development Co., whose share prices soared by 9.9 percent and 7.69 percent respectively.  

The worst-performing stock was Basic Chemical Industries Co., as its share price slipped by 7.57 percent to SR33.60.  

On the announcements front, Seera Group Holding revealed that its net profit rose to SR61 million in the first quarter of this year, representing a rise of 7.01 percent compared to the same period of the previous year.  

In a Tadawul statement, the travel firm noted its total revenue for the first quarter stood at SR1.07 billion year on year driven by continued growth in the car rental and travel platform segments and the new acquisitions within Portman Travel Group.  

Lumi Rental Co. also announced its financial results. The company said that its net profit fell by 11.15 percent to SR44.71 million in the first quarter of this year compared to the same period in 2023.  

Zamil Industrial Investment Co., which reported its earnings, revealed that it swung to a net profit of SR5.42 million in the first three months of this year, compared to a net loss of 13.81 million in the same period of the preceding year.  

Zamil attributed the rise in profits to its sales growth, which went up by 25.5 percent, along with higher operating income in the steel and insulation sectors.  

Meanwhile, Shatirah House Restaurant Co., also known as Burgerizzr, reported a net profit of SR5.3 million in the first quarter of this year, compared to the SR1.4 million net loss it incurred in the same quarter of 2023. 

In a Tadawul statement, Burgerizzr said that the rise in net profit was driven by higher same-store sales and an increased number of guests. 


AI, tech to reshape healthcare in Saudi Arabia, UK: experts

Updated 15 May 2024
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AI, tech to reshape healthcare in Saudi Arabia, UK: experts

RIYADH: Saudi and British experts on Wednesday highlighted the importance of artificial intelligence and technology to enhance healthcare.

Taking to the main stage on the second day of the GREAT Futures Conference in Riyadh, experts from both nations shed light on the fast-evolving landscape of the health sector and the increasing role of the latest technology in that evolution.

A series of panel discussions revealed that the Kingdom aims to reduce waiting time and costs and improve the quality of life for its citizens through a strong focus on a more preventive, patient-centric system that brings quality care beyond the walls of the hospital and into an individual’s own home.

Inaugurating the event, the CEO of the Health Sector Transformation Program, which is part of the nation’s Vision 2030 directives, Dr. Khalid Al-Shaibani, said: “In Saudi Arabia, we have embraced digital health as a priority because of its potential to enhance healthcare delivery, improve patient outcomes, and drive economic growth.”

The CEO further posited that through a clear and unified vision, all sectors of the Saudi government are working together to make this future a reality, saying: “This initiative represents a bold and innovative approach where various sectors collectively work to enhance the health of our nation. By integrating health, equity, and sustainability into all decision-making processes, we foster an environment that promotes the well-being of our citizens.”

A future that, according to Al-Shaibani and his fellow speakers, including the UK’s Undersecretary of State in the Department of Health and Social Care, Nick Markham, and Dr. Abdulaziz Al-Homod, chief medical officer of Seha Virtual Hospital, could allow medical professionals to bridge the gap between primary and secondary care. 

This period, which is often characterized by an utter lack of awareness of the patient’s condition, could be supplemented by wearable technology, which could then track the patient’s vitals while simultaneously uploading them to a unified database, allowing for a clearer understanding of the patient’s progress before secondary care. 

Al-Homod noted that in secondary care, which could also become costly, innovation could further become an asset by allowing visits to be virtual, cutting costs and improving efficiency.

Highlighting the overall enthusiasm of the nation, he said: “It’s good to be here during this time and era if you are a company or a startup that wants to work in healthcare, there is a clear will and a clear strategy and we are focused on people. The healthcare ecosystem is hungry for innovation, and we think NEOM is gonna be unique and that Saudi Arabia is going to continue to lead (in healthcare innovation).”

Discussing areas of collaboration between the two kingdoms and the ever-present question of the use of AI, the undersecretary of state noted that the UK’s national health system, known as the NHS, has an extensive database, perhaps the largest in the world, due to its unified presence since 1948. 

This data could be “fed” to AI to allow for the detection of patterns that were perhaps previously not possible through merely the human eye. 

Markham said: “Actually, we can pull this all together into a fantastic set of data which can be used on parallel anywhere else, and we’ve got the diversity of the population as well because we know a lot of countries have homogeneous populations. You throw that all at AI and start to see patterns that we can’t see.”

According to the British official, this could serve to address long-standing medical questions, such as early detection of dementia and its treatment. 

Further affirming the collaborative relationship between the two nations in the field of emerging technologies, the head of the Research Development and Innovation Authority, Mohammed Al-Otaibi, noted that Saudi Arabia, represented by his body, signed a memorandum of understanding with the UK’s Department for Science, Innovation and Technology to work on research and development in deep-tech and science fields. 

Looking to the future, Al-Otaibi pointed to the recently launched Research Lab Support Program, which aims to disperse SR312 million ($83 million) to 30 entities overseeing 86 research labs across the Kingdom to accelerate R&D in medicine and beyond.