BRATISLAVA, Slovakia: As the world’s largest per capita car producer, Slovakia stands to be hit hardest if US President Donald Trump makes good on his threat to impose a 20 percent tariff on cars imported from the EU, analysts say.
Trump’s threat was the latest salvo in an escalating trade war that saw the European Union slap duties on US-made jeans and motorcycles in a tit-for-tat response to US tariffs on European steel and aluminum exports.
The specter of US tariffs that sent shares in Fiat Chrysler, Daimler and BMW tumbling on European stock exchanges also spooked Slovakia’s automotive sector.
It boasts Germany’s Volkswagen — which is Slovakia’s biggest private-sector employer — France’s PSA and South Korean Kia along with more than 300 automotive supply companies.
All told, they generate over 300,000 jobs in the eurozone country of 5.4 million. Jaguar Land Rover will also open a new plant in September.
This makes Slovakia the EU’s leading car and car part exporter to the United States in terms of share of GDP — and the most vulnerable to tariffs.
“The ratio of overseas car exports to Slovakia’s GDP is significantly the highest among all countries of the EU, with it being up to 1.7 percent,” the Slovak Institute for Financial Policy (IFP) said in a study.
“An increase in customs duties on car imports would have the biggest impact on Slovakia,” it concluded.
As the only Slovakia-based carmaker that exports directly to the US, Volkswagen — and its many local suppliers — will suffer the most should US tariffs be slapped on the high-end Touareg, Audi Q7 and Porsche Cayenne models produced at its Bratislava plant.
Overall, the carmaking sector has a 44 percent share of Slovakia’s total industrial production and 35 percent of its exports.
Last year, 1,001,520 cars rolled off assembly lines in Slovakia and exports were worth €3.7 billion ($4.3 billion).
Annual production has exceeded one million cars in each of the last three years and is forecast to grow by more than a third by 2020.
A 25 percent tariff on cars could cost Slovakia approximately €90 million, according to IFP calculations.
Tariffs would “definitely pose a challenge for Slovak carmakers reaching out to customers in the United States,” Jan Pribula, Secretary General of the Automotive Industry Association of the Slovak Republic (ZAP), said.
Slovak Economy Minister Peter Ziga has said that Bratislava would rally for unity across the EU in the interests of keeping the car sector tariff-free.
Carmakers based in Slovakia have so far declined to comment on possible US tariffs.
“As these plans are only speculations, we will not comment on them,” Volkswagen Slovakia spokesman Michal Ambrovic said.
The German company’s Slovak operation produced 361,776 cars last year, and 99.7 percent of its production was exported, with 20 percent to the US, according to an internal report made available to AFP.
Groupe PSA Slovakia, maker of Citroën C3 and Peugeot 208 in Trnava, also declined to comment on the tariff impact, but spokesman Peter Svec did say that its plant does not sell to the US market.
PSA produced 335,296 cars in 2017, 91 percent of its production was sold to customers EU countries, according to the company annual report.
KIA Slovakia spokesman Andrej SaHajj also confirmed that sales of its vehicles are restricted to Europe.
Slovakia to feel most pain from Trump car tariffs
Slovakia to feel most pain from Trump car tariffs
- Slovakia boasts Germany’s Volkswagen — the country’s biggest private-sector employer — France’s PSA and South Korean Kia along with more than 300 automotive supply companies
- Carmakers based in Slovakia have so far declined to comment on possible US tariffs
Lebanon embraces digital transformation as key to reform and recovery
- Aoun calls it a ‘sovereign decision’ to combat corruption and modernize governance
BEIRUT: Lebanon has pledged to pursue comprehensive digital transformation, with President Joseph Aoun framing it as the nation’s best hope to tackle corruption, moderne governance, and engage its skilled diaspora in rebuilding efforts.
Speaking at the “Smart Government, Diaspora Experts for Lebanon” conference in Beirut on June 3, Aoun described the initiative as a “sovereign decision to build a better future.”
The event, organized by the Lebanese Executives Council, aimed to connect Lebanon’s global talent pool with efforts to revitalize both public and private sectors.
The conference’s core themes included smart governance, public sector reform, and private sector collaboration, all driven by digital innovation. Aoun emphasized that Lebanon must abandon outdated and corrupt administrative structures in favor of efficient, transparent systems.
“Digital transformation is not a technical choice. Digitalization is not just a government project; it is a national project.” He also announced Lebanon’s application to join the Digital Cooperation Organization, a global body founded in 2020 to promote inclusive growth in the digital economy.
Aoun criticized systemic corruption that forces citizens to navigate bureaucracy through bribery or political favors. He highlighted the need for a government that serves all Lebanese equally, free from sectarian or partisan influences.
“We want Lebanon to open up to regional and international partnerships and to be eligible for foreign investments. This goal is an absolute necessity, indispensable and unavoidable,” Aoun said. “The time has come for them (the diaspora) to achieve it for their homeland and in their homeland.”
The day-long conference brought together ministers, private sector leaders, and diaspora experts for panel discussions on digitizing Lebanon’s institutions. Topics included the creation of a national digital ID, policy harmonization, and leveraging technology to reconstruct public services.
In an interview with Arab News, LEC President Rabih El-Amine highlighted the importance of engaging the Lebanese diaspora.
“We know by fact that diaspora is willing to help, but they don’t have the medium to offer this help, and we know by fact that the government needs this help, but they don’t know how to reach the diaspora,” he said.
El-Amine stressed that despite weak governance, Lebanon’s private sector and diaspora have helped sustain the country. However, implementing modern laws and digital systems is now critical. He called the digital ID system a foundational step toward enabling services like passport renewals and license issuance.
“This is probably the starting point. But I think the biggest challenge for us is how we can make the government and the parliament work together in order to issue modern laws for this system to take place,” he added.
Hajar El-Haddaoui, director general of the DCO, expressed strong confidence in Lebanon’s digital potential, citing the country’s talent pool and expansive diaspora.
“We trust that Lebanon does have all the ingredients to succeed during this digital economy transformation,” she told Arab News.
She said the DCO’s support will focus on investment, public-private partnerships, and capacity-building, including the Digital Economy Navigator program, which helps countries assess and close gaps in digital readiness.
El-Haddaoui underscored the importance of aligned policies, strong infrastructure, and openness to international cooperation.
“Any digital economy or digital transformation needs harmonization of policies. That’s really important and critical. Working on a regulation and standard of regulation is really one of the pillars of successful digital transformation,” she said.
Fadi Makki, Lebanon’s minister of state for administrative development affairs, also spoke at the conference, outlining key reforms to upgrade the country’s administrative structures.
“We’re far behind in digital readiness. We’re trying to catch up through digital transformation, skilling, and reskilling programs,” he said.
Makki explained that Lebanon lacks planning and performance monitoring units that are standard in functional governments. He proposed modernizing human resources and encouraging the private sector to deliver services, while the government ensures oversight.
“We don’t want to compete with them (the private sector), but at the same time, we want to create opportunities for them while ensuring we provide the necessary oversight like any government,” he said.
“One of the missing functions in government is planning and performance monitoring. We don’t have that. So, part of our work is creating these basic units, not just centrally but eventually in every ministry. Without them, we’re building on weak foundations,” he added.
The event also featured remarks from Lebanese American University’s Chaouki Abdallah and panels with Minister of Technology and Artificial Intelligence Kamal Shehadi, along with global figures like Jad Bitar of the Boston Consulting Group.
In closing, Prime Minister Nawaf Salam thanked all participants for their contributions and reaffirmed the government’s resolve.
“Digital transformation in Lebanon is not a luxury but a necessity and a reform,” he said. “It directly serves the citizens, reduces corruption, and enhances the quality of life. It is also a prerequisite for economic growth.”
Salam called for full inter-ministerial coordination, asserting, “Lebanon cannot remain outside the digital world or on its margins.”
He concluded: “We are determined to be part of the regional and global digital economy and to reconnect Lebanon with the chains of knowledge and production in the 21st century.”
As Lebanon continues to navigate a complex political and economic crisis, the conference marked a clear call for reform. The message from both domestic and diaspora leaders was unambiguous: digital transformation is not only possible—it is imperative.
Saudi Arabia’s non-oil sector growth continues in May as PMI climbs to 55.8
RIYADH: Saudi Arabia’s non-oil private sector registered an improvement in operating conditions in May, as the Riyad Bank Purchasing Managers’ Index rose to 55.8, signaling continued economic expansion, a new analysis showed.
According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, the index edged up from 55.6 in April, remaining well above the 50 mark that separates growth from contraction.
However, the figure remained below the recent high of 60.5 recorded at the beginning of 2025.
The latest data pointed to a sharp increase in new order volumes, which rebounded after weakening in April.
Companies linked the increase to stronger customer demand, improved sales performance, industrial development, and marketing efforts. Foreign orders also rose, but at the slowest pace in seven months.
“Saudi Arabia’s non-oil economy maintained solid momentum in May, with the PMI rising slightly to 55.8 from 55.6. While the pace of output growth eased to its softest since September 2024, overall activity remained robust,” Naif Al-Ghaith, chief economist at Riyad Bank, said.
He added: “Firms reported improvements in demand, new project starts, and greater labor capacity as key drivers. This expansion, though slightly softer, reflects stable operating conditions and continued confidence across the private sector midway through the second quarter.”
The survey showed that output continued to grow, though at a softer rate for the fourth straight month. The construction sector recorded the strongest rises in both output and new business.
Employment in the non-oil sector rose sharply in May, with the increase in staffing levels among the fastest seen in over a decade. Surveyed businesses attributed this to expansion efforts and higher output needs.
“Looking ahead, sentiment among non-oil firms has strengthened visibly. Business expectations looking forward reached their highest level since late 2023. Hiring momentum remained strong as companies expanded teams to support output growth, particularly in operations and sales,” Al-Ghaith said.
Meanwhile, purchasing activity surged to a 14-month high. However, firms showed greater caution toward stockpiling, resulting in a slower accumulation of inventories compared to April.
The report also indicated that input prices rose sharply, mainly due to increased supplier charges for raw materials.
Wage-related inflation, however, eased. Despite cost pressures, companies reduced their selling prices, largely driven by a decline in service sector charges and competitive market conditions.
The survey data were collected from around 400 private sector companies across the manufacturing, construction, wholesale, retail, and services sectors.
Closing Bell: Saudi main index closes in red at 10,832
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, as it shed 17.66 points, or 0.16 percent, to close at 10,832.43.
The total trading turnover of the benchmark index was SR3.55 billion ($946 million), with 123 of the listed stocks advancing and 106 declining.
The Kingdom’s parallel market Nomu gained 65.84 points to close at 27,049.84.
The MSCI Tadawul Index edged down by 0.08 percent to 1,383.41.
The best-performing stock on the main market was Fawaz Abdulaziz Alhokair Co., with its share price surging by 6.71 percent to SR17.50.
The share price of Naseej International Trading Co. also rose by 6.14 percent to SR83.
Saudi Research and Media Group also saw its stock price rising by 5.92 percent to SR150.40.
Conversely, the share price of United Carton Industries Co., dropped by 3.98 percent to SR41.
On the announcements front, Meyar Co. said that it received a contract worth SR1.67 million from the Municipality of Unaizah.
In a Tadawul statement, the company revealed that the agreement includes the supply of curbs stones and interlock tiles to the municipality. It added that there are no related parties involved in the deal.
The share price of Meyar Co. edged up by 0.93 percent to SR54.
Dar Almarkabah for Renting Cars Co. said that it signed a chauffeur-driven car rental contract valued at SR6.98 million with Wareed Health Medical Co.
In a Tadawul statement, the company revealed that the contract period is valid for 24 months, adding that the impact of the deal will be visible in the firm’s financials during the second quarter of this year.
The share price of Dar Almarkabah for Renting Cars Co. was unchanged at SR2.47.
Qatar records $137m budget deficit in Q1, ending 3-year surplus streak
RIYADH: Qatar posted its first budget deficit in more than three years — a 500 million Qatari riyal ($137 million) shortfall in the first quarter of 2025, the Ministry of Finance reported.
Ministry figures show the same period last year registered a 2.06-billion-riyal surplus.
This comes as Doha undertakes a cautious fiscal recalibration mid-way through its Third National Development Strategy, relying on conservative oil-price assumptions, program-based budgeting, and a long-anticipated value-added tax rollout to diversify revenue.
In a series of posts on X, the ministry stated: “The State Budget recorded a deficit of QR 0.5 bn in Q1 2025, and the deficit was financed through debt instruments.”
It added: “The value of contracts with foreign companies reached QR 1.5 billion in the first quarter of 2025, representing a 50 percent increase compared to the same quarter last year.”
The budget figures showed that revenue fell 7.5 percent year on year to 49.4 billion riyals, with hydrocarbons supplying 42.5 billion riyals while non-oil receipts held at 6.9 billion riyals.
Spending slipped 2.8 percent to 49.9 billion riyals, comprising 6.9 billion riyals for salaries and wages, 18.5 billion riyals in other current costs, and a combined 14.3 billion riyals for major and minor capital projects.
Despite the tighter envelope, procurement remained brisk: state entities awarded about 6.4 billion riyals in tenders and auctions, including 1.5 billion riyals to overseas contractors — up 50 percent on the same period last year.
The ministry’s Sector Business Index showed the busiest spending concentrations in municipality and environment, health, energy and the General Secretariat of the Council of Ministers.
The International Monetary Fund’s February 2025 assessment said Qatar’s economy was moving past the post-World Cup slowdown.
Real gross domestic product is expected to grow about two percent in 2024-25, then average roughly four-and-three-quarters percent once the planned expansion of liquefied natural gas output and the early reforms of the Third National Development Strategy take effect.
Inflation should fall to 1 percent this year and settle near 2 percent over the medium term, it added.
Lower hydrocarbon prices cut the 2023 current-account and budget surpluses to 17 percent and five-and-a-half percent of national output, with a further easing underway; however, both balances should remain positive as gas export volumes rise.
Banks remain sound, holding capital equal to about one-fifth of risk-weighted assets, while problem loans stay below four percent and are well provisioned.
The IMF urged Doha to introduce a value-added tax, adopt a medium-term budget anchor, sharpen the efficiency of public spending, deepen financial-sector oversight, and accelerate private sector-led diversification to secure long-run resilience.
Saudi Aramco secures $5bn in bond sale to bolster financial flexibility
RIYADH: Saudi Aramco has raised $5 billion through a three-tranche bond issuance under its Global Medium-Term Note Program, the company said.
The senior notes, which were priced on May 27 and listed on the London Stock Exchange, include $1.5 billion maturing in 2030 at a 4.75 percent coupon, $1.25 billion maturing in 2035 at 5.375 percent, and $2.25 billion maturing in 2055 with a 6.375 percent coupon.
This follows Aramco’s $6 billion bond sale in July 2024 and comes amid heightened Gulf debt market activity, including Saudi Arabia’s Public Investment Fund, which has raised $5.25 billion so far in 2025 through multiple issuances — including a $4 billion bond in January — and Abu Dhabi’s Masdar, which recently issued a $1 billion green bond.
Ziad Al-Murshed, executive vice president of finance and chief financial officer at Aramco, said: “The strong demand for our new bond offering, as reflected in the diversified orderbook, is a testament to global investors’ confidence in Aramco’s financial resilience and robust balance sheet.”
He added: “Pricing the offering with no new issuance premium across all tranches clearly reflects Aramco’s unique long-term credit proposition.”
The bond offering saw tightened spreads across all maturities, indicating strong investor interest.
The five-year notes were priced at 80 basis points over US Treasuries, while the 10- and 30-year tranches were set at 95 and 155 basis points respectively — each tighter than initial price guidance earlier in the day.
Proceeds from the latest issue will be used for general corporate purposes, as the state oil giant continues to support Saudi Arabia’s Vision 2030 diversification strategy.
The issuance comes as Aramco navigates a more challenging environment marked by declining profits and lower crude prices.
The company reported a 4.6 percent drop in first quarter earnings, citing weaker sales and rising operating costs. In March, it announced plans to cut its dividend by nearly a third due to declining free cash flow.
Amid these headwinds, Aramco is also exploring asset sales and capital market strategies to maintain liquidity and finance its global expansion ambitions.
In May, the company published a new prospectus for a sukuk issuance program, signaling potential future activity in debt markets.
The sukuk, also to be listed on the London Stock Exchange, may be issued over the next 12 months.
Meanwhile, Masdar — Abu Dhabi’s renewable energy company — also returned to the debt market in May with a $1 billion green bond issuance.
The deal was split into two equal tranches of $500 million each, with maturities of five and ten years and coupon rates of 4.875 percent and 5.375 percent, respectively.
The bond was significantly oversubscribed, receiving $6.6 billion in peak orders, which highlights the growing global appetite for sustainable investment instruments.
