BERLIN: German industry groups warned on Sunday, before European Commission President Jean-Claude Juncker meets US President Donald Trump this week, that tariffs the United States has imposed or is threatening to introduce risk harming America itself.
Citing national security grounds, Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1 and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting on Wednesday.
“The tariffs under the guise of national security should be abolished,” Dieter Kempf, head of Germany’s BDI industry association said. Juncker should tell Trump that the United States would harm itself with tariffs on cars and car parts, he told Welt am Sonntag newspaper.
The German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported. “Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.
German Economy Minister Peter Altmaier told Deutschlandfunk radio on Sunday he hoped it was still possible to find a solution that was attractive to both sides. “For us, that means we stand by open markets and low tariffs,” he said
He said the possibility of US tariffs on EU cars was very serious and stressed that reductions in international tariffs in the last 40 years and the opening of markets had resulted in major benefits for citizens.
EU officials have tried to lower expectations about what Juncker can achieve, and played down suggestions that he will arrive in Washington with a novel plan to restore good relations.
Altmaier said it was difficult to estimate the impact of any US car tariffs on the German economy, but added: “Tariffs on aluminum and steel had a volume of just over six billion euros. In this case we would be talking about almost ten times that.”
He said he hoped job losses could be avoided but noted that trade between Europe and the United States made up around one third of total global trade.
“You can imagine that if we go down with a cold in the German-American or European-American relationship, many others around us will get pneumonia so it’s highly risky and that’s why we need to end this conflict as quickly as possible.”
Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag the German economy had for decades counted on open markets and a reliable global trading system but added: “Every day German companies feel the transatlantic rift getting wider.”
German industry groups warn US on tariffs before Trump-Juncker meeting
German industry groups warn US on tariffs before Trump-Juncker meeting
- Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1
- Trump is threatening to extend them to EU cars and car parts
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.
Saudi Arabia’s economic growth to outstrip US, UK, France in 2026: OECD
RIYADH: Saudi Arabia’s real gross domestic product is projected to grow by 2.5 percent in 2026, a rate that surpasses forecasts for the US, Germany, the UK, and France, according to an analysis.
In its latest report, the Organization for Economic Cooperation and Development said that the Kingdom’s economy is projected to grow by 1.8 percent this year, also higher than several of its G20 peers.
In April, the International Monetary Fund projected that the Kingdom’s economy would witness a growth of 3 percent in 2025 and would further accelerate to 3.7 percent the following year.
In its latest report, the OECD also downgraded its global economic growth prospects from 3 percent to 2.9 percent for both 2025 and 2026.
“The global outlook is becoming increasingly challenging. Substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence, and elevated policy uncertainty all pose significant risks to growth,” said the OECD.
It added: “Global GDP growth is projected to slow from 3.3 percent in 2024 to 2.9 percent this year and next year based on the assumption that tariff rates as of mid-May are sustained.”
Collectively, G20 nations are expected to witness an economic growth of 2.9 percent in both 2025 and 2026, with India bucking the trend amid economic volatility.
According to the report, India’s GDP is expected to expand by 6.3 percent in 2025 and 6.4 percent in 2026.
The OECD added that China’s economy will grow by 4.7 percent and 4.3 percent in 2025 and 2026, respectively, while the US is expected to witness an economic growth of 1.6 percent in 2025 and 1.5 percent in 2026.
The French economy is forecast to expand by 0.6 percent in 2025 before slightly accelerating to 0.9 percent in 2026, and the OECD projects the UK’s economy will advance by 1.3 percent in 2025, while it will decelerate to 1 percent growth next year.
According to the report, Germany’s GDP is set to grow by 1.2 percent during 2026.
The OECD further stated that Saudi Arabia is expected to maintain a healthy inflation rate of 1.9 percent in 2025 and 1.8 percent in 2026, respectively.
In April, the IMF also predicted that inflation in the Kingdom would remain contained, with the average annual rate holding steady at 2.1 percent in 2025 and easing slightly to 2 percent the following year.
Collectively, among G20 nations, inflation is expected to average 3.6 percent in 2025 and 3.2 percent in 2026, according to OECD.
“Rising trade costs — particularly in countries implementing new tariffs — are likely to fuel inflation, although this may be partly offset by softer commodity prices. Risks to the outlook remain substantial,” said OECD.
It added: “Inflation may also stay elevated for longer than anticipated, especially if inflation expectations continue to rise. On the upside, an early reversal of recent trade barriers could boost economic growth and help ease inflationary pressures.”
The OECD emphasized that governments should work together to resolve their concerns about the global trading system rather than escalating tensions through more retaliatory trade barriers.
The analysis urged governments to implement reforms that would reduce trade fragmentation, along with strengthening the supply chain by diversifying both suppliers and buyers.
The OECD also highlighted the importance of implementing effective monetary policies, noting that central banks should remain vigilant to prevent disinflation in times of heightened uncertainty and increased trade costs.
“Provided trade tensions do not intensify further and inflation expectations remain anchored, policy rate reductions can continue in economies where inflation is projected to moderate,” added the report.
The study also emphasized the need to increase investments to ensure resilient growth among nations, suggesting that governments should implement structural policy reforms to revitalize the business environment.
According to the OECD, governments should foster business dynamism by promoting competition, reducing entry barriers, and supporting entrepreneurship.
“Reducing policy uncertainty is particularly important, as it would lower the risk premia businesses build into their hurdle rates, thereby encouraging capital spending,” added the OECD.
Saudi banks’ new-home lending jumps 24% to $9bn despite higher rates
RIYADH: Saudi banks extended SR34.1 billion ($9.1 billion) worth of fresh residential mortgages to individuals in the first four months of 2025, up 24.14 percent from the same period last year.
Latest data from the Saudi Central Bank, also known as SAMA, shows that January led the surge with SR10.5 billion in new loans, followed by February at SR8.9 billion, March at SR8.4 billion and April at SR6.3 billion.
The brisk start to the year pushed total outstanding retail real-estate lending to a record SR698.8 billion at the end of the first quarter, surpassing the SR223.4 billion on corporate property books and underscoring the dominance of households in the market.
The momentum is tied to a range of Vision 2030 housing initiatives aimed at lifting Saudi home ownership to 70 percent by the end of the decade.
Flagship programs such as Sakani, low-cost mortgage guarantees and the Saudi Real Estate Refinance Co.’s liquidity windows continue to funnel buyers into the market.
Digital procurement partnerships are also speeding up delivery times. In February, Riyadh-based Penny Software teamed up with the National Housing Co. to automate sourcing for thousands of new units, a move expected to shave costs across the supply chain.
The platform will function as a centralized procurement hub, directly connecting NHC contractors with vetted suppliers to streamline purchasing and enhance supply-chain oversight, tackling the bottlenecks that traditional procurement creates in housing projects.
The acceleration has come in the face of the highest interest rate environment in nearly two decades.
Knight Frank’s February household survey showed demand is cooling. Only 29 percent of Saudi tenants now plan to buy a home in 2025, down from 40 percent a year earlier, with “house prices being too high” ranking among the top three deterrents after already owning a property and having no reason to move.
The consultancy pins the softer appetite on “a high-interest-rate environment and rampant price growth, particularly in Riyadh,” which is nudging younger Saudis toward renting instead of owning.
Official figures confirm that tight supply is still feeding through to valuations. The General Authority for Statistics said Saudi real estate prices rose 4.3 percent year on year in the first quarter, with residential values up 5.1 percent.
Villa prices jumped 10.3 percent nationwide, while residential land — which carries the heaviest weight in the index — gained 5.3 percent.
Knight Frank’s survey also showed private buyers still eyeing flagship giga-projects such as NEOM and the Red Sea, although interest in the former has moderated as alternative master-planned communities come on stream.
With oil receipts fueling fiscal space, policymakers are expected to keep subsidising mortgages and unlocking land banks, even as central-bank rates remain high through mid-2025.
Kuwait non-oil sector maintains solid expansion while Egypt edges closer to recovery: S&P
RIYADH: Business conditions in Kuwait’s non-oil private sector continued to expand in May, while Egypt experienced a slower pace of contraction, offering tentative signs of stabilization.
According to the latest Purchasing Managers’ Index surveys released by S&P Global, Kuwait’s PMI stood at 53.9, down slightly from 54.2 in April but remaining comfortably above the 50 no change mark.
Meanwhile, Egypt’s PMI rose from 48.5 in April to 49.5 in May, its highest level in three months, but still below the neutral 50.0 threshold that separates growth from contraction.
In Kuwait, non-oil firms reported strong growth in both output and new orders, extending a streak of expansion to 28 consecutive months.
Respondents attributed the uptick to competitive pricing strategies and enhanced marketing efforts.
Kuwait’s expansion aligns with broader economic projections by the International Monetary Fund and the World Bank, with real gross domestic product growth forecasts of 1.9 percent and 3.3 percent, respectively, in 2025.
These projections reflect a recovery from two consecutive years of contraction, supported by rising oil production as OPEC+ cuts ease, and expanding non-oil activity led by infrastructure development and credit growth.
“The strong growth seen in April was largely maintained in May, with companies in Kuwait again reporting sharp increases in output and new orders,” said Andrew Harker, economics director at S&P Global Market Intelligence.
“This sustained expansion is putting pressure on firms to build capacity, and extra staff were hired accordingly in May,” he added.
Employment rose for the third consecutive month, and the rate of job creation was the joint-fastest recorded since the PMI series began in 2018.
However, staffing growth remained modest overall and did not fully alleviate rising backlogs of work.
“The pace of job creation was still only modest, however, and backlogs of work continued to rise, so we may see even greater employment growth in the months ahead,” Harker added.
Purchasing activity also increased for the second month running, and firms reported a solid build-up in input inventories. Supplier performance improved, with delivery times shortening for the third consecutive month.
Cost pressures intensified midway through the second quarter, driven by rising prices for advertising, transport, staffing, food, and stationery.
Input price inflation accelerated to its highest level since March 2024, prompting firms to raise output prices at the sharpest rate in nearly a year.
Despite these challenges, business confidence reached a 12-month high in May, with 36 percent of respondents expecting output to grow over the next year.
Optimism was supported by stronger demand, competitive pricing, and ongoing marketing activity.
Egypt en route to stabilization
In Egypt, although the non-oil private sector remained under pressure, the pace of deterioration in business conditions slowed.
The headline PMI of 49.5, up from 48.5 in April, indicated the mildest contraction since February.
The improvement came amid softer declines in both output and new business, aided by a rebound in the manufacturing sector.
Egypt’s softer PMI contraction in May aligns with the IMF’s upward revision of the country’s growth forecast to 3.8 percent for 2025, signaling emerging signs of resilience in the non-oil economy.
“Output and new orders fell at the slowest rates for three months,” said David Owen, senior economist at S&P Global Market Intelligence.
“Nevertheless, a number of surveyed firms continued to report softness in market demand, leading them to cut back on purchases and staffing,” he added.
Companies in Egypt reduced purchasing activity at the fastest rate since October, citing efforts to streamline inventories in response to subdued demand.
Stock levels of inputs rose only marginally. Employment fell for the fourth consecutive month, though the decline remained mild, driven primarily by a policy of not replacing staff who voluntarily left their positions.
Egyptian businesses faced the steepest rate of input cost inflation so far in 2025, with price increases reported for fuel, cement, and paper.
Volatile exchange rates, particularly the weakening of the Egyptian pound against the US dollar, further contributed to supplier price hikes.
Wage inflation, by contrast, remained modest. After flatlining in April, output prices rose at the fastest pace in seven months as firms passed on part of their rising costs to customers.
Sentiment in Egypt improved slightly from April, though optimism remained below historical norms.
“Although many of the key PMI metrics continued to indicate a deterioration in business conditions in May, the overall pace of decline was not as sharp as in April and softer than the survey’s historical trend,” Owen added.
Persistent cost pressures and weak domestic demand continued to weigh on expectations for future activity.
Some businesses voiced concern over external headwinds, including global trade uncertainty and the impact of US tariffs.
Saudi airline flynas’ IPO oversubscribed by nearly 350%
RIYADH: Saudi low-cost carrier flynas finalized its initial public offering share allocation at SR80 ($21) per share, the top of its indicated range, following robust demand from institutional and retail investors.
The pricing values the airline at an estimated market capitalization of SR13.6 billion at listing.
The offering comes after flynas announced plans last month to float 30 percent of its share capital on the Saudi Exchange, becoming the first airline in the Kingdom to go public and the Gulf’s first in nearly two decades.
Between May 28 and June 1, 666,069 retail investors oversubscribed the offering by nearly 350 percent, receiving 10.25 million shares, or 20 percent of the total. Institutional investors showed even stronger appetite, oversubscribing their tranche by roughly 100 times, with orders totaling SR409 billion from both local and international buyers.
In a press release, flynas stated: “Each retail investor was allocated a minimum of 10 shares, with the remaining shares allocated on a pro-rata basis in proportion to the size of demand, resulting in an average allocation factor of 12.3 percent.”
It added: “Any surplus subscription funds will be refunded to retail investors no later than Thursday, 5 June 2025.”
The company’s shares are expected to list and begin trading on the Main Market of the Saudi Exchange once regulatory requirements are met with the Capital Market Authority and the exchange. The exact listing date will be announced in due course.
The IPO marks a key milestone for the company as it seeks to strengthen its market position and expand its operational footprint.
“This strategic move will propel us toward becoming the leading low-cost carrier in the MENA region for short and medium-haul markets by 2030,” Bander Al-Mohanna, CEO and managing director of flynas, said last month.
He added: “Through this IPO, we are offering investors access to a unique and valuable asset in the rapidly growing KSA and GCC aviation sector.”
The strong interest from both retail and institutional investors reflects rising confidence in the Kingdom’s aviation sector and its broader economic diversification efforts.
Launched in 2007, the airline holds a 23 percent share of Saudi Arabia’s domestic aviation market and operates one of the youngest fleets in the region, with an average aircraft age of 3.2 years. The airline reported an 88 percent on-time performance rate in 2024.
Proceeds from the IPO will be used to expand its fleet — including a major order for 225 Airbus aircraft — enhance services for Hajj and Umrah travelers, and invest in cargo operations.
The strong capacity growth of flynas aligns with Saudi Arabia’s national goal to establish itself as a global tourist and business destination. The Kingdom aims to attract over 150 million visitors by the end of this decade.
