CAIRO: Egypt’s annual urban consumer-price inflation rate declined to 7.5% in August, the lowest rate in years, and analysts said it opened the way for further rate cuts by the central bank.
The inflation rate, reported by the official statistics agency CAMPAS on Tuesday, was lower than some analysts expected. The July pace was 8.7%.
Egypt is approaching the end of an economic reform program backed by the International Monetary Fund that during 2017 saw inflation rise to a high of 33%.
Core inflation, which strips out volatile items such as food, also declined, to 4.9% in August from 5.9% in July, the central bank said on Tuesday.
According to Refinitiv data, August’s headline rate was the lowest in more than six years.
“[August’s rate] falls well below the 9% target the Egyptian Central Bank had set itself for the end of 2020. This paves the way for another large rate cut on Sept. 26,” said Jaap Meijer, head of equity research at Arqaam Capital.
The central bank cut rates by 150 basis points at its last monetary policy committee meeting, on Aug. 22, encouraged by the declining inflation rate.
Radwa El-Swaify, head of research at Pharos Securities Brokerage, said the August number is “positive and gives positive signs for interest rates in the next meeting. We expect a cut of 1%-1.5%.”
Egypt raised domestic fuel prices in July 2019 as part of the terms of the IMF agreement, and the increase had been expected to push up prices for transport, food products and other goods.
Nadene Johnson, an economist at NKC African Economics, said the August inflation number resulted partly from a favorable base effect from a year earlier. In August 2018, Egypt’s headline inflation rate was 14.2%, after subsidies were cut.
She also said a strengthening currency as well as low global oil prices “would support further easing of price pressures.”
“Nonetheless, with energy reforms complete, and with global oil prices on the bearish side, we expect inflation to ease gradually in the coming year, albeit slightly higher toward the end of this year,” Johnson said.
Egypt’s August inflation rate falls to 7.5%, lowest in years
Egypt’s August inflation rate falls to 7.5%, lowest in years
- The inflation rate was lower than some analysts expected
- The July pace was 8.7%
Saudi Arabia targets 30% land protection by 2030 in sustainability push
RIYADH: Saudi Arabia now has 20 percent of its territory designated as protected areas, a significant rise from just 3 percent a decade ago, according to a senior official.
By 2030, this figure is projected to increase to 30 percent, said the Minister of State for Foreign Affairs and the Kingdom’s envoy for climate, Adel Al-Jubeir.
During the “Climate Envoy Perspective” panel at the 4th Saudi Green Initiative Forum, Al-Jubeir highlighted Saudi Arabia’s dedication to environmental preservation and sustainability.
“We are protecting 30 percent of our territory; it will be protected areas, both sea and land,” Al-Jubeir said, emphasizing the country’s efforts to conserve biodiversity and ensure sustainable resource management.
He added: “The fact is, we used to (have) 3 percent of our territory protected 10 years ago, now we’re almost at 20 percent, and by 2030 will be 30 percent.”
Saudi Arabia’s commitment to protecting its environment is evident in a wide range of initiatives. “We’re working on sustainable fishing in the Red Sea, as well as in the Gulf, and we’re making sure that everything we do is very, very in line with protecting our environment,” Al-Jubeir said.
He also emphasized that tourism projects along the Red Sea are being developed with rigorous sustainability and environmental standards, ensuring minimal impact on marine life.
“We have launched more than 80 initiatives in Saudi Arabia, from turning waste into energy, from redesigning our cities, from planting trees, from capturing carbon, both naturally as well as using technology, and we are transitioning towards renewable energy,” Al-Jubeir added.
He highlighted the Kingdom’s ambitious energy goals, saying: “50 percent of our electricity by 2030 will come from renewable energy, the other 50 percent from natural gas.”
The Kingdom’s efforts extend beyond its borders, with the nation supporting global initiatives to combat environmental challenges. “We’re helping countries adopt a circular carbon economy approach so that they can deal with planting and environmental issues more effectively,” Al-Jubeir explained.
Addressing land degradation, the minister emphasized its global impact. “We believe that the issue of land degradation is not just an environmental issue; it’s a national security issue, it’s a global issue, because land degradation means less ability to produce food, which means people go from no-food areas to areas where they can grow food,” he said.
Al-Jubeir also underscored the economic benefits of sustainability. “When you invest in solar energy and wind, it’s not only sustainable and good for the environment, it’s also very good for the pocketbook,” he said. “Investors are more confident when they come to a country where they have clean water, clean air, and so this is part of what we’re doing.”
The minister highlighted the broader importance of environmental preservation, stating: “People are more productive when the environment in which they live is pleasant. We breathe the same air as everybody else. We need the same water like everybody else, and so we are very, very sensitive to our environment and to ensuring that we protect it and that we restore it if it needs to be restored.”
Saudi Arabia, known as the world’s most efficient producer of oil and gas, is also emerging as a global leader in renewable energy. “We are an example for the world in terms of energy, in terms of renewable energy, in terms of our commitment to the environment,” Al-Jubeir said.
He stressed the Kingdom’s focus on collaboration and practical solutions to address climate challenges.
“We believe that we have the technology, we believe that we have the financial resources. We believe that by working together, we can overcome many of the challenges that we face, but we cannot do this if we’re trying to assign blame or trying to point fingers,” Al-Jubeir added.
COP16: Over $12bn pledged for drought resilience and land restoration on 2nd day
RIYADH: More than $12 billion has been pledged for drought resilience, land restoration, and combating land degradation at the 16th Conference of the Parties to the UN Convention to Combat Desertification.
The Arab Coordination Group contributed an additional $10 billion to address desertification, land degradation, and drought, according to a press release.
This follows the launch of the Riyadh Global Drought Resilience Partnership, with $1 billion each from the OPEC Fund and Islamic Development Bank, and $150 million from Saudi Arabia.
The pledges were made during the Ministerial Dialogue on Finance, a key segment of COP16 focused on unlocking public and private sector funding.
“With over $12 billion pledged for major land restoration and drought resilience initiatives in just the first two days, COP16 in Riyadh is already proving a landmark moment in the fight against drought,” said Osama Faqeeha, deputy minister for Environment, Ministry of Environment, Water and Agriculture, and advisor to the UNCCD COP16 Presidency.
“I hope this is just the beginning, and over the coming days and weeks, we see further contributions from international private and public sector partners, that further amplify the impact of vital drought resilience and land restoration initiatives,” Faqeeha added.
He also called for the redirection of Official Development Assistance funds to address land degradation and drought. “As shown by the UNCCD’s latest report, there is a dire need for additional international funding,” Faqeeha added.
Speaking on behalf of the Arab Coordination Group, Muhammad Al-Jasser, chairman of the Islamic Development Bank Group, said: “Recognizing the critical role of finance in advancing these efforts, we commit to allocate up to $10 billion in financing approvals by 2030. These funds will target global land restoration, desertification prevention, and nature positive development projects aligned with the objectives of the Riyadh Global Drought Resilience Partnership.”
The UNCCD’s latest financial needs assessment report revealed that $355 billion annually is required from 2025 to 2030 to meet land restoration targets, but only $77 billion in investments are projected.
On the second day of COP16 in Riyadh, the UNCCD released its financial needs assessment report, which also highlighted the private sector’s limited involvement. It contributes just 6 percent of global funding, despite the potential to generate up to $1.8 trillion annually from restoring over one billion hectares of land.
As COP16 progresses, there is growing pressure for international stakeholders to close the financing gap and accelerate efforts to combat land degradation and boost drought resilience.
Aramco, Linde, and SLB partner on major carbon capture hub in Jubail
- Under the agreement, Aramco will hold a 60 percent equity stake, with Linde and SLB each owning 20 percent
- The initiative supports Aramco’s broader ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050
RIYADH: Saudi energy giant Aramco has signed a shareholders’ agreement with Linde and SLB to advance the development of a major carbon capture and storage hub in Jubail,
Under the agreement, Aramco will hold a 60 percent equity stake, with Linde and SLB each owning 20 percent, according to a press release.
Located in Saudi Arabia’s Eastern Province, the project is set to be among the largest of its kind globally. It marks a critical step toward Aramco’s emission mitigation goals and aligns with its 2035 interim climate objectives.
Phase one of the hub aims to capture and store up to 9 million tonnes of CO2 annually, with construction expected to be completed by the end of 2027. Future phases will further expand its capacity.
“CCS plays a critical role in furthering our sustainability ambitions and our new energies business. This announcement represents a step forward in delivering on our strategy to contribute to global carbon management solutions and achieve our emission mitigation goals,” said Ashraf Al-Ghazzawi, executive vice president of strategy & corporate development at Aramco.
He added: “Aramco’s collaboration with SLB and Linde demonstrates the importance of global partnerships in driving technological innovation, reducing emissions from conventional energy sources and enabling new, lower-carbon energy solutions.”
The executive noted that the CCS hub was among several programs that would enable them to meet the rising demand for affordable, reliable, and more sustainable energy.
The initiative supports Aramco’s broader ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050, as well as its interim target to reduce upstream carbon intensity by 15 percent by 2035.
Oliver Pfann, Linde’s executive vice president for Europe, the Middle East and Africa, noted the project’s significance to Saudi Arabia’s climate goals. “Carbon capture and sequestration is essential for achieving the Kingdom’s emission reduction targets. Linde is proud to collaborate with Aramco and SLB, contributing Linde’s innovative technology and experience in delivering world-scale decarbonization projects,” he said.
Announced during the Saudi Green Initiative Forum in Riyadh, the project reflects Saudi Arabia’s commitment to achieving its 2060 net-zero target.
Phase one will capture CO2 from three Aramco gas plants and other industrial sources. The CO2 will be transported through a pipeline network and stored in a saline aquifer, leveraging the region’s geological capacity for carbon storage.
Gavin Rennick, SLB’s president of new energy, highlighted the hub’s potential to reduce emissions. “Leveraging our proven portfolio of CCS technologies and extensive experience in complex CCS projects around the world, we are confident that SLB will play a critical role in advancing this important initiative. This project aligns perfectly with our commitment to industrial decarbonization, and we look forward to collaborating closely with Aramco and Linde to make it a success.”
The hub also complements Aramco’s blue hydrogen and ammonia initiatives, reinforcing its efforts to support a circular carbon economy and contribute to the Kingdom’s energy transition.
Oil Updates — prices inch up on geopolitical tensions, OPEC+ supply plans
- Brent crude futures rose 23 cents, or 0.3%, to $73.85 a barrel
- Analysts expect a 700,000 barrel decline in crude and a 639,000-barrel increase in gasoline
SINGAPORE: Oil prices firmed on Wednesday as market participants weighed up geopolitical tensions and the prospect of OPEC+ extending supply cuts against weaker demand, according to Reuters.
Brent crude futures rose 23 cents, or 0.3 percent, to $73.85 a barrel by 10:00 a.m. Saudi time, while US West Texas Intermediate crude futures gained 19 cents, or 0.3 percent, to $70.13.
On Tuesday, Brent posted its biggest gain in two weeks, rising 2.5 percent.
A shaky ceasefire between Israel and Hezbollah, South Korea’s curtailed declaration of martial law and a rebel offensive in Syria that threatens to draw in forces from several oil-producing countries, all lent support to oil prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Oil markets, however, are largely discounting an abundantly supplied 2025 amid sluggish demand signals from the US and China, the world’s top two economies, she added.
“Weaker demand signals from mainland China are raising concerns about demand in the oil market ... The world’s largest crude oil importer may struggle to maintain its significant share of global demand by 2025.”
Meanwhile, crude oil inventories in the US rose 1.2 million barrels last week, market sources said, citing data from the American Petroleum Institute.
Gasoline inventory also rose, by 4.6 million barrels, even though the week included Thanksgiving when demand typically rises as families travel by car for holiday get-togethers.
Official data on oil stocks from the US Energy Information Administration is due on Wednesday at 6:30 p.m. Saudi time. Analysts polled by Reuters expect a 700,000 barrel decline in crude and a 639,000-barrel increase in gasoline.
Also supporting prices, the Organization of the Petroleum Exporting Countries and allies, or OPEC+, will likely extend output cuts until the end of the first quarter of next year when members meet on Thursday, industry sources told Reuters. OPEC+ has been looking to gradually phase out supply cuts through next year.
“The main issue facing any return of OPEC+ supply is that non-OPEC supply growth in 2025 is expected to eclipse the growth in global oil demand,” said Commonwealth Bank of Australia analyst Vivek Dhar in a note.
“The International Energy Agency expects non-OPEC supply growth, led by the US, Canada, Guyana and Brazil, to increase supply by 1.5 million barrels per day next year. Global oil demand is only expected to lift about 1 million bpd as China’s oil demand is expected to remain subdued.”
In the Middle East, Israel said on Tuesday it would return to war with Hezbollah if their truce collapses, and its attacks would go deeper into Lebanon and target the state itself. The comment followed the deadliest day since Israel and Hezbollah agreed to a ceasefire last week.
In neighboring Syria, rebels advancing against government forces pushed close on Tuesday to the major city of Hama, rebels and a war monitor said, after their surprise capture of Aleppo last week.
Saudi Crown Prince unveils National Red Sea Sustainability Strategy to drive blue economy
- Covering 186,000 sq. km and featuring 1,800 km of coastline, the area is home to diverse marine ecosystems, including the world’s fourth-largest barrier reef system and 6.2 percent of global coral reefs
- The initiative reflects Saudi Arabia’s broader efforts to integrate environmental sustainability into its economic agenda while developing its marine-based industries
RIYADH: Saudi Crown Prince Mohammed bin Salman has launched the National Red Sea Sustainability Strategy, an initiative aimed at safeguarding the marine environment, supporting local communities, and advancing the Kingdom’s transition to a blue economy.
The strategy is part of Saudi Vision 2030 and ties into national priorities for research, development, and innovation, particularly in environmental sustainability, the Saudi Press Agency reported.
“The Kingdom of Saudi Arabia continues to unleash its enormous economic, geographical and cultural potential, and its pioneering efforts in sustainability and environmental conservation,” said the Crown Prince, who also serves as prime minister and chairman of the Council of Economic and Development Affairs.
He added: “Through this strategy, the Kingdom positions the blue economy as a fundamental pillar of its diversified economy and aspires for the Red Sea region to become a global reference for leading blue economy activities, and for the Kingdom to become a global leader in the field of research, development and innovation in blue economy.”
Covering 186,000 sq. km and featuring 1,800 km of coastline, the area is home to diverse marine ecosystems, including the world’s fourth-largest barrier reef system and 6.2 percent of global coral reefs.
The strategy outlines measures to protect these resources while developing industries such as ecotourism, fisheries, renewable energy, and water desalination.
By 2030, the plan seeks to expand marine and coastal protected areas from 3 percent to 30 percent, increase the share of renewable energy in the energy mix to 50 percent, and create new jobs in the blue economy. It also aims to protect investments in coastal tourism, which are expected to contribute to the national economy.
The strategy focuses on five main objectives: environmental sustainability, economic development, social development, safety and security, and governance. It includes 48 initiatives designed to balance economic activity with environmental preservation and address climate challenges, the SPA added.
The Crown Prince emphasized the Kingdom’s commitment to a sustainable future for the Red Sea, adding, “We look forward to everyone’s cooperation in protecting our Red Sea coast and the nature and communities that depend on it.”
The initiative reflects Saudi Arabia’s broader efforts to integrate environmental sustainability into its economic agenda while developing its marine-based industries.
