Turkish lira hits record low as inflation spooks traders
Turkish lira hits record low as inflation spooks traders/node/1729706/business-economy
Turkish lira hits record low as inflation spooks traders
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A gold dealer counts Turkish lira banknotes at his shop at the Grand Bazaar in Istanbul, Turkey, on August 6, 2020. (REUTERS/Murad Sezer/File Photo)
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Prices of everyday commodities are soaring in Turkey as the country’s beleaguered currency continues its fall, losing 20 percent of its value in the past year despite central bank support measures. (AFP)
Turkish lira hits record low as inflation spooks traders
Pressure grows on central bank to tighten credit after intervention fails to halt currency’s plunge
Updated 05 September 2020
Reuters
BENGALURU, India: The Turkish lira slipped to a record low on Friday on concerns around stubbornly high inflation, while emerging market stocks tumbled for a third straight session following a tech-fueled plunge on Wall Street overnight.
The lira eased 0.1 percent against the dollar to an all-time low of 7.4541, weakening for the fifth session in a row with pressure growing on the central bank to continue tightening credit a day after data showed year-on-year inflation of 11.77 percent.
The currency has lost about 20 percent this year despite central bank intervention and, along with Hungary’s forint, is among Europe’s worst performing currencies. The forint was a touch lower at 359.53 a euro on Friday as data showed industrial output dropped by an annual 8.1 percent in July.
HIGHLIGHTS
Turkish lira slides for fifth straight session.
Russian rouble firms ahead of inflation data.
EM currencies set for second week of gains.
“The underperformance of these currencies tells us about longer-term prospects: We think it is a template for which currencies would be vulnerable in a more sustained EM FX sell-off,” said Tatha Ghose, FX analyst at Commerzbank.
An index of emerging market currencies inched higher on Friday and was on course for its second straight week of gains due to earlier weakness in the dollar following the Federal Reserve’s new accommodative stance
on inflation.
The Russian rouble firmed for a second consecutive session following a 2.6 percent slide on Wednesday as German Chancellor Angela Merkel said Kremlin critic Alexei Navalny was poisoned. Sources said that the EU was weighing new sanctions on Moscow over the poisoning.
In South Africa, the rand firmed 0.5 percent, but the return of nationwide electricity blackouts this week has kept the currency from making a major headway. State power utility Eskom said it would reduce power cuts on Friday due to lower demand and much improved weather.
Saudi Arabia’s consumer spending to stay resilient, experts say
Millennials and Gen Z consumers will continue driving demand for e-commerce and cross-border retail
Government spending and economic diversification are playing a vital role in stimulating consumer spending
Updated 16 sec ago
Nirmal Narayanan
RIYADH: Consumer spending in Saudi Arabia is expected to stay robust this year, driven by a youthful population and digitalization, according to multiple experts.
Speaking to Arab News, Sunil Kumar, CEO of supermarket chain Spinneys, said that consumer spending in the Kingdom is expected to witness a compound annual growth rate of 6.4 percent from 2022 to 2028, while UAE will see an expansion of 4.3 percent during the same period.
The views of Kumar align with the findings of a recent report published by global consulting firm AlixPartners which said Saudi Arabia’s consumer market is evolving rapidly, characterized by adaptability, shifting spending patterns, and resilience in the face of global economic challenges.
Spinneys’s CEO explained that as the Saudi and UAE economies continue to achieve growth, consumer confidence remains strong, fueling demand for premium products.
“Convenience is another important factor, with the accelerating penetration of aggregators, as well as proprietary e-commerce platforms like our own, making fresh, premium products quickly and easily accessible,” he said.
Spinneys opened its first Saudi store in June 2024, with 12 additional stores expected to open across the Kingdom by 2028. Spinneys
Factors driving consumer spending
Usman Iftikhar, principal in the retail and consumer goods practice for India, the Middle East, and Africa at Oliver Wyman, told Arab News that strategic government investments, digital advancements, and tourism initiatives are some of the major factors that are driving the growth of consumer spending in the Middle East and North Africa.
Iftikhar added that the MENA region now has a dynamic and evolving marketplace, fostering increased demand for a wide range of goods and services.
“The region has a young and growing population, which drives demand for goods and services, particularly in sectors such as education, technology, and entertainment. For example, in Saudi Arabia, one of the largest markets in the MENA region, more than 60 percent of the population is under the age of 30,” said Iftikhar.
He added: “Government spending and economic diversification play a vital role in stimulating consumer spending. Many countries in the region are investing in infrastructure, tourism, and non-oil sectors, boosting employment and consumer confidence.”
The Oliver Wyman official added that increased internet penetration and smartphone adoption are fueling e-commerce growth in the region, and is reshaping how consumers shop.
Jim Liu, general manager of AliExpress for the GCC region, shared identical views and told Arab News that consumer spending growth in the MENA region is fueled by rapid technological advancements, evolving consumer preferences, and a digitally native, mobile-first population.
“Structural reforms, increased investments in digital infrastructure, and the rise of payment solutions are further enhancing online retail accessibility,” said Liu.
Speaking to Arab News in February, Ali Bailoun, regional general manager of Visa, also highlighted how consumer retail spending in the Kingdom is expected to grow significantly in the coming years, with the share of e-commerce in the overall sector projected to reach 46 percent by 2030.
All these views align with Saudi Arabia’s ongoing transition toward a diversified, digitally-driven economy, with e-commerce playing a crucial role.
Sectors benefiting from increased consumer spending
Experts told Arab News that several sectors including electronics and gadgets, food and beverages, entertainment and leisure, and travel and tourism, will be the beneficiaries of increased consumer spending in Saudi Arabia and the wider Middle East region.
According to AlixPartners report, groceries and clothing categories are expected to dominate as key spending categories in 2025, with consumers prioritizing value-driven deals and savings.
Highlighting the growth of the entertainment sector in the Kingdom, the analysis added that 33 percent of Saudi consumers plan to increase spending on entertainment outside of the home, well above the 19 percent global average.
Usman Iftikhar, principal in the retail and consumer goods practice for India, the Middle East, and Africa at Oliver Wyman. Supplied
“Entertainment and leisure activities are seeing increased demand as disposable incomes rise. For instance, Saudi Arabia’s Vision 2030 aims to boost household spending on entertainment from 2.9 percent to 6 percent by 2030, reflecting a growing appetite for cinemas, theme parks, and recreational activities,” said Iftikhar.
He added: “The travel and tourism sector is rebounding, with hospitality and airlines benefiting from renewed consumer interest.”
Kumar said that sustained economic growth and rising disposable incomes in Saudi Arabia and the UAE are having a very positive impact on grocery shopping.
“The fresh food segment continues to see especially strong demand, driven by a growing consumer preference for high-quality, healthy and sustainably sourced products. At Spinneys, fresh food accounted for more than 63 percent of sales in 2024, with standout performances by product categories including fresh fruit, premium berries and organic products,” added Kumar.
Liu said that strong economic policies are elevating business confidence in the region, with consumer spending expected to increase significantly in tech gadgets.
“At AliExpress, we see this trend reflected in high demand for tech gadgets, fashion, household electronics, and lifestyle products — categories where consumers are prioritizing quality, affordability, and convenience,” added Liu.
The impact of inflation
According to Oliver Wyman’s Iftikhar, inflation and global economic uncertainty are significantly affecting purchasing behavior among consumers, creating a sense of cautious optimism regarding overall spending.
Citing a survey carried out by his firm, Iftikhar said that 31 percent of households in Saudi Arabia reported a drop in income during 2024, with 11 percent experiencing declines of more than 50 percent.
The findings revealed that to save money, many consumers are changing their shopping behaviors, with 48 percent of those surveyed reporting comparing prices, and 46 percent actively looking for stores that offer lower prices.
“Retailers must adapt to these shifting behaviors to meet the evolving needs of a consumer base increasingly focused on maximizing value,” he added.
Kumar of Spinneys shared a different view and noted that the company is not seeing a slowdown in spending in response to inflation, with consumers instead preferring high-quality products, especially in the food sector.
Liu also shared similar views and said: “At AliExpress, we are seeing sustained growth in the region as more consumers turn to our platform for high-quality products at affordable prices — items they would typically pay more for elsewhere. This shift highlights the increasing importance of affordability, promotions, and personalized shopping experiences in maintaining customer trust and loyalty.”
Consumer spending: The future outlook
Iftikhar also outlined several key trends that will reshape the consumer spending pattern in the Middle East region over the next few years, with a particular focus on the rise of artificial intelligence.
“AI revolution is gaining traction, with over 50 percent of customers in the GCC expressing excitement about the potential of generative AI to enhance their online and in-store experiences. Generative AI can significantly reshape the consumer experience by enabling companies to tailor products and offerings more effectively,” said Iftikhar.
He added that personalization is becoming a key differentiator in consumer expectations, with more than 60 percent of customers interested in tailored promotions and recommendations.
Liu said that the future of consumer spending in MENA will be shaped by digital-first retail strategies, economic diversification, and a mobile-driven shopping culture.
“The region is undergoing a payment revolution, with digital wallets and alternative payment methods like buy now, pay later gaining significant traction. Quick commerce is emerging as a significant sector, and this growth is driven by demand for rapid delivery across non-grocery categories like beauty, pharma, electronics, and fashion,” said Liu.
The AliExpress official added that millennials and Gen Z consumers, who expect seamless, tech-enabled shopping experiences, will continue driving demand for e-commerce and cross-border retail.
Focusing on the future of the retail food industry in the region, Kumar said that consumer spending in the GCC will be shaped by health, sustainability and convenience.
He added that the region is witnessing a rising demand for whole food sources, high-protein and nutrient-dense foods, as consumers become more conscious of the effects of processed eatables.
“Convenience remains at the forefront of consumer preference, with functional beverages and nutrient-dense snacks gaining traction. However, we expect this to evolve beyond speed and ease – with consumers now seeking hyper-personalized options that deliver on health, flavor and sustainability,” said Kumar.
UAE reaches 26 trade agreements under economic partnership initiative
The deals come as Free Trade Agreements across the GCC region on the rise
Updated 20 min 3 sec ago
Nirmal Narayanan
RIYADH: The UAE has signed five new trade deals so far in 2025, bringing the total number reached under its Comprehensive Economic Partnership Agreement program to 26.
According to the state news agency WAM, Malaysia, New Zealand, and Kenya, as well as Ukraine and the Central African Republic, all signed deals in the first quarter of the year.
These agreements sit alongside those inked with countries such as Turkiye, India, and Indonesia since the CEPA program was launched in September 2021.
CEPA is a free trade agreement between two countries designed to reduce or eliminate barriers to trade and investment, thereby facilitating stronger commercial ties between the participating parties.
The UAE is also in the final stages of negotiations with several major economies, including Japan, and the talks are expected to be concluded by the end of this year, the statement revealed.
According to WAM, the CEPAs are having a positive impact on the UAE’s goal to raise the total value of the non-oil foreign trade in goods to 4 trillion dirhams ($1.09 trillion) and to increase non-oil exports to 800 billion dirhams by the year 2031.
“The CEPA program has accelerated this upward trajectory, supporting progress toward the targets outlined in the ‘We the UAE 2031’ vision,” said the statement.
The news agency further said that these agreements, signed over a period of less than four years, significantly expanded the country’s global trade network while creating new opportunities for the UAE’s private sector and businesses.
Alongside the six deals that have already come into force, 14 are undergoing technical and ratification procedures in preparation for implementation.
The report added that negotiations on another six agreements have been finalized, and the signings are expected to happen soon.
According to the UAE’s Ministry of Economy, the six CEPA deals that have come into force are with India, Israel, and Indonesia, as well as Turkiye, Cambodia, and Georgia.
The ministry added that another CEPA agreement with Costa Rica will come into force on April 1.
Following the CEPA agreement with India, which became effective in May 2022, non-oil trade between the UAE and the Asian nation grew by 20.5 percent, with the Emirates’ exports to India jumping by 75 percent by the end of 2024.
WAM added that trade with Turkiye rose by over 11 percent, with Indonesia seeing growth exceeding 15 percent, and Georgia recording a remarkable 56 percent increase since the implementation of CEPA.
The major beneficiaries of these CEPA agreements include sectors such as logistics, clean and renewable energy, advanced technology and applications, and financial services.
Other key sectors benefiting from these deals include green industries, advanced materials, agriculture, and sustainable food systems.
Free Trade Agreements across GCC region on the rise
UAE’s CEPA program comes as many Gulf nations are seeking to improve non-oil trade through free trade agreements.
In December, Saudi Arabia’s General Authority for Foreign Trade led the first round of negotiations for a deal between the Gulf Cooperation Council and Japan.
A month earlier, New Zealand entered into a free trade agreement with the six-nation Gulf Cooperation Council, which includes Saudi Arabia, the UAE and Qatar.
Jasem Mohamed Al-Budaiwi, secretary general of the GCC, said at that time that the agreement is expected to drive economic growth and development in both countries by facilitating trade, attracting investment, and creating new opportunities for businesses and industries.
In February, Qatar’s emir Sheikh Tamim bin Hamad al Thani met with Indian Prime Minister Narendra Modi, and discussed various ways to enhance bilateral ties, with discussions underway for a future free trade agreement.
Speaking at the time, Arun Kumar Chatterjee, the secretary of India’s Ministry of External Affairs, said his government is keen to implement a broader India-GCC free trade agreement, and negotiations with Qatar are a first step in this process.
India is also on the road to finalize a comprehensive trade and investment agreement with Oman.
In January, Omani Commerce Minister Qais bin Mohammad Al-Yousef told Press Trust of India that the pact, which is expected to be finalized this year, could significantly boost two-way trade and investment ties between both countries.
The UK has also been negotiating with countries in the GCC since 2022 to establish a free trade agreement.
In November, its Business and Trade Secretary Jonathan Reynolds visited Dubai as a part of the European nation’s efforts to complete the talks.
A key economic partner for the region is China, and in September, the country’s Premier Li Qiang called for free trade negotiations between his country and the GCC nations to speed up.
He added that China is ready to further strengthen communication and coordination and consolidate the political foundation of bilateral ties, while also urging both sides to deepen cooperation in energy, investment, innovation, science and technology.
Gold hits record high, on track for best quarter since 1986 on tariff worries
Bullion up over 18 percent so far for the quarter
Trump expected to announce reciprocal tariffs on April 2
Silver, platinum, palladium set for monthly gains
Updated 31 March 2025
Reuters
BENGALURU: Gold hit a record high and was set to post its biggest quarterly gain in over 38 years on Monday, as concerns over US President Donald Trump’s tariff plans widening the global trade war and triggering an economic slowdown boosted bullion’s appeal.
Spot gold jumped 1.1 percent to $3,116.82 an ounce, as of 0638 GMT, after hitting an all-time high of $3,128.06 earlier. US gold futures was up 1.1 percent to $3,148.00.
Gold, traditionally seen as a hedge against political and economic uncertainties, has risen over 18 percent so far this quarter, its biggest quarterly gain since September 1986.
Interest rate cut bets, central bank buying and exchange-traded fund demand are the other factors that have supported the rally. The rapid price rise prompted multiple banks to increase their 2025 price forecasts.
The dollar index eased 0.2 percent, making greenback-priced gold less expensive for buyers holding other currencies.
“Markets’ anxiety levels have been ramping up ahead of the reciprocal US tariff announcements, which is keeping gold in high demand as a defensive play,” KCM Trade chief market analyst Tim Waterer said.
“If the tariff announcements this week are not as severe as feared, then the gold price could start to backtrack as profit-taking from the highs may be triggered.”
Trump is expected to announce reciprocal tariffs on April 2, while automobile tariffs will take effect on April 3. On Sunday, Trump said he was “pissed off” at Russian President Vladimir
Putin and would impose secondary tariffs of 25 percent-50 percent on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine.
Meanwhile, San Francisco Federal Reserve Bank President Mary Daly said inflation data released on Friday confirms her decreased confidence in her baseline expectation that two rate cuts this year are a “reasonable” projection.
Spot silver rose 0.6 percent to $34.32 an ounce, platinum was up 1.1 percent to $994.60 and palladium gained 0.9 percent to $980.11. All three metals headed for monthly gains.
Oil Updates — prices ease despite Trump warning of possible tariffs on Russian buyers
Updated 31 March 2025
Reuters
LONDON: Oil prices slipped on Monday, heading for a modest quarterly loss, despite a warning from US President Donald Trump that he may impose secondary tariffs on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine.
The more active June Brent crude futures fell 30 cents, or 0.4 percent, to $72.46 a barrel by 6:30 a.m. Saudi time, while US West Texas Intermediate crude declined 33 cents, or 0.5 percent, to $69.03 a barrel.
Front-month Brent, which was down 26 cents, or 0.4 percent, at $73.36, expires later on Monday.
Both benchmarks were on track to end the month slightly lower, and post their first quarterly drop in two quarters.
Trump said on Sunday he was “pissed off” at Russian President Vladimir Putin and will impose 25 percent-50 percent secondary tariffs on buyers of Russian oil if he feels Moscow is hindering his efforts to end the war in Ukraine. Trump said he could impose the new trade measures within a month.
“There are a couple of ways to read the headlines and the price sell-off. The first is that the market isn’t buying into Trump’s threats and doesn’t believe it,” IG market analyst Tony Sycamore said.
“The second is that Trump’s threats, if enacted, would be another step down the pathway toward a trade war, which will weigh on global growth and demand for crude oil.”
Trump also threatened Iran on Sunday with bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program.
Meanwhile, the OPEC+ group, which comprises OPEC and allies led by Russia, is set to begin its program of monthly increases in oil production in April. The group will likely continue to raise oil output in May, Reuters reported last week.
“We expect WTI to stay in a range of $65 to $75 for now as the market assesses the impact of Trump tariffs on oil supply and global economy, as well as the supply situation from the US and OPEC+,” said Yuki Takashima, an economist at Nomura Securities.
Top oil exporter Saudi Arabia may lower its crude prices for Asian buyers in May to a three-month low, tracking the steep declines in benchmark prices this month, traders said.
Elsewhere, Iran has lowered the price of its light crude oil grade for Asian buyers to $3.95 a barrel above the Oman/Dubai average for April.
Talks to restart Kurdish oil exports through the Iraq-Turkiye pipeline have hit a snag as a lack of clarity over payments and contracts persists, two sources with direct knowledge of the matter told Reuters.
Qatar’s producer prices steady in February as oil, gas drag index
Updated 30 March 2025
REEM WALID
RIYADH: Qatar’s general producer price index for the industrial sector stood at 114.01 points in February, reflecting stability compared to January and a 0.33 percent decrease year on year.
Released by the Gulf country’s Planning and Statistics Authority, the data indicated that the PPI for the industrial sector is made up of four main components: mining and quarrying, which constitutes 82.46 percent, manufacturing at 15.85 percent, electricity at 1.16 percent, and water at 0.53 percent.
The newly released figures align with Qatar’s inflation easing by 1.15 percent year on year in January, with the consumer price index settling at 107.45 points, driven by declines in food, housing, and transport costs, official figures showed.
This trend is consistent with the 2.53 percent drop in CPI in January, mainly attributable to a decline in housing, water, electricity, and other fuel costs.
The decline comes as Qatar is projected to record the lowest inflation in the Gulf Cooperation Council region this year, averaging 1.4 percent, below the GCC’s 1.9 percent and the wider Arab region’s 8.5 percent, according to Kamco Invest.
The data further showed that the mining and quarrying sector index declined by 0.12 percent compared to January, primarily owing to a 0.11 percent drop in the prices of crude oil and natural gas extraction, while the costs for other mining and quarrying activities remained unchanged.
Annually, the sector’s index dropped by 0.42 percent, primarily due to a decline in oil and gas extraction, although there was a modest 0.06 percent increase in prices for other mining and quarrying activities.
In the manufacturing sector, the index rose by 0.50 percent on a monthly basis, driven by price increases in rubber and plastic products, refined petroleum, chemicals, and basic metals, as well as cement, non-metallic minerals, and beverages.
On an annual basis, the manufacturing sector index increased by 0.60 percent compared to the corresponding month a year earlier, driven by a notable rise in prices for basic metals, cement and non-metallic mineral products, and rubber and plastic products, as well as chemical products, beverages, and printing.
In the electricity, gas, and air conditioning supply sector, the index rose by 1.01 percent compared to January but showed a year-on-year decline of 8.28 percent.
The water supply sector saw a decrease in its index by 2.75 percent compared to January but recorded an annual increase of 7.24 percent in February.
The numbers also indicated that prices declined for refined petroleum goods and food products, while there was no change in the prices of printing and reproduction of recorded media.
