JEDDAH: International Islamic Trade Finance Corporation (ITFC) is scheduled to sign deals on Thursday exceeding $1 billion to support strategic commodities for a number of its member countries, CEO of ITFC Hani Salem Sonbol told Arab News.
The deals target the socioeconomic and trade development of these countries.
“The ITFC work is very diverse,” Sonbol told Arab News in an exclusive interview on the sidelines of the 42nd Islamic Development Bank (IDB) annual meeting that concludes Thursday. “We cover all aspects. Because we came to believe that financing alone will not help member countries.”
The Jeddah-based ITFC, which is an autonomous entity within the IDB, has 57 member countries from Suriname in South America to Indonesia in Southeast Asia.
The total IDB group trade financing since inception is $60 billion, out of which the ITFC contributed $36 billion to the member countries.
The main sectors that the ITFC supports are the energy and the agricultural sector. Each country is supported according to its need.
“We customize solutions,” Sonbol said, adding “We don’t have one size fits all.”
The business model adopted by the ITFC is to respond to the changing needs of member countries and the new challenges facing them. The model entails blending trade finance and trade development aspects.
“We don’t have shelf products, except for direct financing, ‘Murabaha’ financing, which is a cost-plus-profit arrangement in Islamic finance,” he said, adding that each country needs a program designed to fit its specific needs.
Two-thirds of the supported member countries are in Africa. Earlier this week, the ITFC signed a three-year $450 million framework agreement with the government of Burkina Faso, which Sonbol described as “one of the major clients.”
The agreement aims to enhance the country’s ability to export agricultural commodities such as cotton and also import its needs from the basic strategic commodities like crude oil and refined petroleum products as well as agricultural input.
The largest portion of the ITFC’s portfolio is to enhance the energy sector in the member countries; at almost 60 percent. This includes green energy, Sonbol said.
“What is new now is the ITFC is aware of the changes that new types of energy actually exist and that’s why we also try to innovate our products and programs to support renewable energy, green finance, and all these environment-friendly products,” he said.
There are new items on the ITFC agenda today. Digitization is one of them. Renewable energy, climate change, which is directly linked to trade finance, is another. Food security and an important sector that the ITFC is supporting, which is the agricultural sector, are also on the agenda.
Other programs are related to capacity building, promotional trade, and business-to-business (B2B) contracts. “Recently we had a very important B2B between African cotton producers and Bangladeshi cotton importers. We try to facilitate trade through our programs, build capacities in member countries,” Sonbol said.
As there is a regional move toward diversifying the economy to adjust to the recent oil crises, there is a move to invest in the SMEs industry.
The ITFC is designing new programs for SMEs to help meet challenges in areas like access to finance and capacity building.
“They need knowledge and advice so we support with advisory services,” Sonbol said, adding that the ITFC is currently working with the Saudi Ministry of Commerce to develop the SME sector in the Kingdom.
Boosting SMEs is among the goals in the Saudi Vision 2030 and they are described as being “among the most important agents of economic growth; they create jobs, support innovation and boost exports,” the Saudi Vision states.
Sonbol said that this program could be replicated in other countries in the future.
“We have been supporting SMEs in the private sector in general and we have achieved almost $10 billion of financing to this important sector.”
He added that the sector plays a major role in the diversification of the economy, similarly in Morocco, Tunisia or Pakistan.
ITFC to sign $1bn agreements to boost trade development in member states
ITFC to sign $1bn agreements to boost trade development in member states
Closing Bell: Saudi main index retreats to 10,731.59
- Parallel market Nomu lost 393.70 points to settle at 26,404.44
- MSCI Tadawul Index dropped 11.64 points, closing at 1,380.40
RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Sunday, declining 109.35 points, or 1.01 percent, to close at 10,731.59.
Trading turnover reached SR5.15 billion ($1.37 billion), with only 25 stocks advancing while 233 declined.
The parallel market, Nomu, also ended the session in negative territory, losing 393.70 points, or 1.47 percent, to settle at 26,404.44. A total of 24 stocks rose while 70 registered losses. The MSCI Tadawul Index dropped 11.64 points, or 0.84 percent, closing at 1,380.40.
Saudi Research and Media Group led the day’s gainers, with its share price climbing 9.89 percent to SR155.60. Dr. Sulaiman Al Habib Medical Services Group rose 3.82 percent to SR261, and Jazan Development and Investment Co. advanced 3.32 percent to SR10.28.
On the losing side, MBC Group Co. posted the steepest decline, falling 9.99 percent to SR36.95. Modern Mills for Food Products Co. slipped 6.66 percent to SR30.85, while Wafrah for Industry and Development Co. dropped 6.27 percent to SR26.15.
On the announcements front, Tabuk Agricultural Development Co. signed an agreement with the National Electricity Transmission Co., a subsidiary of Saudi Electricity Co., under the Kingdom’s Liquid Displacement Program.
The project aims to cut emissions by replacing liquid fuels used in power generation at the company’s facilities with electricity, while improving operational reliability without imposing significant financial burdens.
Separately, Professional Medical Expertise Co., also known as ProMedEx, signed a memorandum of understanding with Zhende Medical Co., Ltd and MedSurg FZ-LLC to establish a joint manufacturing venture in Saudi Arabia.
The facility will produce medical supplies tailored to the domestic market and the wider region. Under the agreement, Zhende Medical will hold a 51 percent stake in the new entity, ProMedEx will own 35 percent, and MedSurg will hold the remaining 14 percent. Capital details will be disclosed at a later stage.
Oman residential property prices jump 7.3% in Q1 on land demand
- Jump driven by 6.5% rise in residential land prices
- Apartment prices rose 17% in May, while villas gained 6.4%
RIYADH: Oman’s residential property prices climbed 7.3 percent year on year in the first quarter of 2025, led by a sharp increase in residential land values, official figures showed.
According to data from the National Center for Statistics and Information, the jump was driven by a 6.5 percent rise in residential land prices, which form the largest component of the real estate index.
The gain reflects a broader regional upswing in property activity during early 2025. In the Kingdom, residential property prices rose 4.3 percent in the first quarter. The UAE continued to post strong gains, with Dubai prices climbing 16.5 percent and Abu Dhabi villa prices increasing 4.4 percent over the same period. In Qatar, real estate transactions reached 1.27 billion Qatari riyals ($350 million) in March alone.
Oman is working to ramp up housing supply as part of its Vision 2040 strategy, aiming to deliver 62,800 new residential units by 2030. Some 5,500 of these are expected to hit the market in 2025, according to consultancy Cavendish Maxwell.
NCSI data also showed strong momentum within individual property types. Apartment prices rose 17 percent in May, while villas gained 6.4 percent, and prices for other residential units increased 2.2 percent. The overall residential real estate price index grew 5.5 percent quarter on quarter in the first three months.
On an annual basis, land prices climbed 5.5 percent, apartment prices rose 4.3 percent, and villa prices increased 4.5 percent. Other home types saw the steepest gains, rising 13.4 percent compared to the same period last year.
At the governorate level, Muscat led the price growth with a 17.4 percent increase in residential land values year on year in the first quarter. Musandam followed with a 12.8 percent rise, while Al-Batinah North and South recorded gains of 7.3 percent and 6.1 percent, respectively. Dhofar and Ash Sharqiyah South posted more moderate increases.
However, the gains were not uniform across the country. Al Buraimi saw residential land prices plummet 35.1 percent, followed by declines in Al Dhahirah at 25.3 percent, Al Wusta at 20.4 percent, Ad Dakhiliyah at 3.7 percent, and Ash Sharqiyah North at 0.8 percent.
Oman’s real estate market ended 2024 on a strong note, with total transaction values rising 28.1 percent year on year to 3.13 billion Omani rials ($8.13 billion) by November, according to NCSI.
In a bid to attract foreign capital and stimulate development, the sultanate has rolled out a series of reforms, including relaxed ownership restrictions for non-citizens and new tax incentives aimed at boosting investor confidence.
Investors on edge over Israel-Iran conflict, anti-Trump protests
- Israel launched a barrage of strikes across Iran on Friday and Saturday
- Strikes knocked risky assets on Friday, including stocks
NEW YORK: Dual risks kept investors on edge ahead of markets reopening late on Sunday, from heightened prospects of a broad Middle East war to US-wide protests against US President Donald Trump that threatened more domestic chaos.
Israel launched a barrage of strikes across Iran on Friday and Saturday, saying it had attacked nuclear facilities and missile factories and killed a swathe of military commanders in what could be a prolonged operation to prevent Tehran building an atomic weapon.
Iran launched retaliatory airstrikes at Israel on Friday night, with explosions heard in Jerusalem and Tel Aviv, the country’s two biggest cities.
On Saturday Prime Minister Benjamin Netanyahu said Israeli strikes would intensify, while Tehran called off nuclear talks that Washington had held out as the only way to halt the bombing.
Israel on Saturday also appeared to have hit Iran’s oil and gas industry for the first time, with Iranian state media reporting a blaze at a gas field.
The strikes knocked risky assets on Friday, including stocks, lifted oil prices and prompted a rush into safe havens such as gold and the dollar.
Meanwhile, protests, organized by the “No Kings” coalition to oppose Trump’s policies, were another potential damper on risk sentiment. Hours before those protests began on Saturday, a gunman posing as a police officer opened fire on two Minnesota politicians and their spouses, killing Democratic state assemblywoman Melissa Hortman and her husband.
All three major US stock indexes finished in the red on Friday, with the S&P 500 dropping 1.14 percent. Oil and gold prices soaring. The dollar rose.
Israel and Iran are “not shadowboxing any more,” said Matt Gertken, chief geopolitical analyst at BCA Research. “It’s an extensive and ongoing attack.”
“At some point actions by one or the other side will take oil supply off the market” and that could trigger a surge in risk aversion by investors, he added.
Any damage to sentiment and the willingness to take risks could curb near-term gains in the S&P 500, which appears to have stalled after rallying from its early April trade war-induced market swoon. The S&P 500 is about 20 percent above its April low, but has barely moved over the last four weeks.
“The overall risk profile from the geopolitical situation is still too high for us to be willing to rush back into the market," said Alex Morris, chief investment officer of F/m Investments in Washington.
US stock futures are set to resume trading at 6 p.m. (2200 GMT) on Sunday.
With risky assets sinking, investors’ expectations for near-term stock market gyrations jumped.
The Cboe Volatility Index rose 2.8 points to finish at 20.82 on Friday, its highest close in three weeks.
The rise in the VIX, often dubbed the Wall Street ‘fear gauge,’ and volatility futures were “classic signs of increased risk aversion from equity market participants,” said Michael Thompson, co-portfolio manager at boutique investment firm Little Harbor Advisors.
Thompson said he would be watching near-term volatility futures prices for any rise toward or above the level for futures set to expire months from now.
“This would indicate to us that near-term hedging is warranted,” he said.
The mix of domestic and global tensions is a recipe for more uncertainty and unease across most markets, BCA’s Gertken said.
“Major social unrest does typically push up volatility somewhat, and adding the Middle Eastern crisis to the mix means it’s time to be wary.”
UAE posts 4% GDP growth in 2024 as economic diversification accelerates
- Non-oil GDP grew by 5%, totaling 1,342 billion dirhams
- Central Bank forecasts 4.5% growth in 2025 and 5.5% in 2026
JEDDAH: The UAE’s gross domestic product reached 1.77 billion dirhams ($481.4 billion) in 2024, recording 4 percent growth, with non-oil sectors contributing 75.5 percent of the total, highlighting diversification progress.
The Central Bank of the UAE has maintained its real GDP growth forecast at 4 percent for 2024, with an expected acceleration to 4.5 percent in 2025 and 5.5 percent in 2026.
According to the Central Bank’s Quarterly Economic Review for December 2024, this growth outlook was supported by strong performances in tourism, transportation, financial and insurance services, construction and real estate, and communication sectors.
In comparison, Saudi Arabia, the largest economy in the region, recorded a modest growth rate of 1.3 percent in 2024, with its non-oil sector contributing 54.8 percent of GDP as the Kingdom steadily advances its Vision 2030 reforms.
Qatar’s economy expanded by 2.4 percent, supported by non-hydrocarbon activities comprising nearly 64 percent of GDP, reflecting ongoing efforts to broaden its economic base.
Oman’s GDP grew by 1.7 percent, driven by a 3.9 percent increase in non-oil activities, particularly in industry and services, while Kuwait’s economy contracted by 2.7 percent in 2024 due to lower oil revenues under extended OPEC+ cuts, though its non-oil sector showed relative resilience with stronger private sector credit growth.
According to the Federal Competitiveness and Statistics Centre, the non-oil GDP grew by 5 percent, totaling 1,342 billion dirhams, while oil-related activities contributed 434 billion dirhams to the overall economy.
Minister of Economy Abdulla bin Touq Al-Marri emphasized that the latest GDP figures released by the FCSC reflect a renewed and positive momentum in the national economy, according to the UAE’s official news agency.
He added that they further underscore the new milestones achieved by the UAE in economic diversification and competitiveness, guided by the vision and directives of its leadership.
The minister emphasized that “these indicators reflect the sustained success of the nation’s economic strategies, which are driving the transition toward an innovative, knowledge-based, and sustainable economic model aligned with global trends and emerging technologies,” WAM reported.
“With each milestone, we are moving closer to achieving the UAE’s target of raising GDP to 3 trillion dirhams by the next decade, while reinforcing its position as a global hub for the new economy, driven by sustainable development, international competitiveness, and forward-looking leadership,” Al-Marri said, as per WAM.
FCSC Managing Director Hanan Mansour Ahli saId that the UAE’s 4 percent GDP growth in 2024 reflects the country’s strong economic performance, driven by a forward-looking vision centered on sustainable, non-oil-led development.
As per the WAM report, the transport and storage sector was the fastest-growing contributor to the country’s GDP last year, expanding by 9.6 percent year-on-year. This surge was largely attributed to the outstanding performance of the country’s airports, which handled 147.8 million passengers, marking a rise of nearly 10 percent.
It added that the building and construction sector registered an 8.4 percent growth in 2024, driven by robust investments in urban infrastructure. Financial and insurance activities grew by 7 percent, while the hospitality sector, including hotels and restaurants, saw a 5.7 percent increase.
The real estate sector also posted a 4.8 percent rise during the same period.
Based on the FCSC findings, the news agency stated that with regard to non-oil economic activities that contributed most to the GDP, the trade sector contributed 16.8 percent, the manufacturing sector accounted for 13.5 percent, and financial and insurance activities contributed 13.2 percent.
“Construction and building contributed 11.7 percent, while real estate activities accounted for 7.8 percent of the non-oil GDP,” it concluded.
According to WAM, passenger traffic through the UAE’s airports also saw a notable rise of 10 percent, reaching a total of 147.8 million travelers.
Meanwhile, financial and insurance activities grew by 7 percent, while the hospitality sector, including restaurants and hotels, expanded by 5.7 percent. The real estate sector posted a 4.8 percent growth, underscoring its continued importance in the nation’s economic landscape.
Saudi inflation holds steady at 2.2% in May
- CPI remained stable in May 2025, recording 0.1% increase
- Broader inflation picture reinforced by wholesale price data, which showed 2% year-on-year increase
RIYADH: Saudi Arabia’s annual consumer inflation edged up to 2.2 percent in May, with rental prices emerging as the principal driver behind the increase.
The uptick was fueled by an 8.1 percent rise in housing rents, including a 7.1 percent increase in villa rental prices, according to the latest data released by the General Authority for Statistics.
While inflation across the Middle East and Central Asia shows signs of easing, country-level dynamics remain mixed, with Egypt reporting 16.8 percent in May, Jordan at 1.98 percent, Saudi Arabia holding steady at 2.2 percent, and Dubai’s rate moderating to 2.3 percent in April.
In a release, GASTAT stated: “On a monthly basis, the consumer price index remained stable in May 2025, recording a 0.1 percent increase compared to April 2025.”
It added: “This was mainly due to a 0.3 percent rise in housing, water, electricity, gas, and other fuels section, driven by a 0.4 percent increase in actual housing rent prices.”
On a month-to-month basis, the consumer price index recorded only a modest increase, signaling relative price stability. However, key segments such as housing, food and beverages, and personal goods and services contributed to the mild inflationary pressure, partially offset by declines in transportation and household furnishings.
The Kingdom’s inflation dynamics in May highlight the ongoing strain in the housing sector, where rising rental costs have been the most significant inflationary force.
The housing, water, electricity, gas, and other fuels category saw a year-on-year increase of 6.8 percent, driven primarily by the sharp climb in actual rents.
This sector carries the greatest weight in the consumer basket, representing 25.5 percent of the overall index, which significantly increases its impact on the national inflation rate.
GASTAT stated that “rents paid for housing in May 2025 increased by 8.1 percent, attributed to a 7.1 percent increase in rental prices for villas,” underscoring the persistent demand pressures in the residential rental market.
As urban development and population growth continue, rental affordability may remain a critical issue for policymakers.
The upward trend in rents is being driven by a complex mix of structural and economic factors.
Residential demand in Saudi Arabia’s largest cities, particularly Riyadh and Jeddah, has increased as urban populations grow and Vision 2030 development projects attract investment.
Major initiatives such as NEOM and Jeddah Central are fueling this trend. At the same time, housing supply has not kept pace, especially in the rental market, despite a pipeline of 3.5 million residential units.
Construction activity remains below the level needed to stabilize prices. Rising costs for building materials and labor have also pushed up developers’ expenses, contributing to higher rents.
These dynamics reflect the Kingdom’s rapid urban development under Vision 2030, which aims for a 70 percent homeownership rate and a diversified economy.
However, as mortgage-backed homeownership increases, rental demand remains strong, continuing to perpetuate upward pressure on rents.
In addition to housing, food and beverage prices rose by 1.6 percent compared to May 2024, largely driven by a 2.8 percent increase in the prices of meat and poultry.
These gains coincide with trends observed in the wholesale sector, where the prices of agricultural and fishery products jumped by 4.4 percent over the same period.
Agricultural products alone posted a 6.2 percent rise, and fishing products increased by 6.1 percent, indicating upstream cost pressures that are gradually being passed on to consumers.
The personal goods and services category also saw a notable annual rise of 4 percent, led by a 24.4 percent increase in prices of jewelry, watches, and precious antiques.
This increase, while potentially reflecting stronger discretionary spending, also suggests elevated pricing in the luxury goods segment. Meanwhile, catering services drove a 1.8 percent increase in restaurant and hotel prices, adding modestly to overall inflation.
Education and health costs recorded limited inflation, with education rising by 1.3 percent, primarily due to a 5.6 percent increase in non-university post-secondary costs.
Health-related prices remained broadly stable, providing some relief in an otherwise inflationary environment.
However, certain sectors experienced deflationary pressures. Furnishings and household equipment prices dropped by 2.5 percent year on year, largely because of a 4 percent decline in furniture, carpets, and flooring prices.
Clothing and footwear prices fell by 0.9 percent, driven by a 2.7 percent reduction in footwear prices.
Transport costs also decreased by 0.8 percent, as the price of vehicle purchases dropped by 1.9 percent.
These categories helped counterbalance some of the broader upward pressures on the index.
On a monthly basis, the CPI’s 0.1 percent increase was relatively muted. Food and beverage costs rose by 0.1 percent, while personal goods and services increased by 0.5 percent, and tobacco prices ticked up 0.2 percent.
However, several categories saw declines: transportation fell 0.2 percent, recreation and culture decreased 0.1 percent, furnishings dropped 0.7 percent, clothing and footwear slipped 0.4 percent, and communication declined 0.1 percent.
The prices of education, health, and restaurants and hotels showed no significant month-over-month changes.
Wholesale Price Index
The broader inflation picture is reinforced by wholesale price data, which showed a 2 percent year-on-year increase in the wholesale price index in May.
The WPI tracks the prices of goods before they reach the retail level, offering insights into future consumer price trends.
The rise was mainly driven by the same categories that affected the CPI: agriculture and fishery products, which increased by 4.4 percent, and other transportable goods, excluding metals and machinery, which rose by 4.3 percent.
“This increase was primarily driven by an 8.2 percent rise in the prices of refined petroleum products,” the WPI report stated.
Furniture and other transportable goods not elsewhere classified recorded a sharp 9 percent increase, further signaling inflationary pressures in non-essential consumer goods.
Conversely, wholesale prices of metal products, machinery, and equipment fell by 0.3 percent, affected by a 5.1 percent decline in the prices of radio, television, and communication equipment, as well as a 3.3 percent decrease in general-purpose machinery prices.
The prices of ores and minerals dropped by 1.5 percent, reflecting a general cooling in commodity prices, mainly due to a reduction in the prices of stone and sand.
Monthly changes in the WPI were largely flat, recording no overall change from April.
A slight 0.1 percent rise in the prices of transportable goods and ores was balanced out by a 0.3 percent decline in agricultural products and a 0.2 percent fall in metal and digital machinery prices.
