BRUSSELS: European Union leaders will clash this week over the EU’s 2021-2027 budget as Britain’s exit leaves a 75 billion euro ($81 billion) hole in the bloc’s finances just as it faces costly challenges such as becoming carbon neutral by 2050.
The budget is the most tangible expression of key areas on which the EU members must focus over the next seven years and their willingness to stump up.
For the coming seven-year cycle, the starting point for talks is 1.074% of the bloc’s gross national income (GNI), or 1.09 trillion euros. By contrast, EU national budgets claw in 47% of annual output (GDP) on average.
Still, disputes over hundredths of percentage points have kept EU and government officials busy for the last two years and many diplomats remain skeptical that a deal will be reached on Thursday and Friday, when leaders meet in Brussels.
“Tomorrow’s summit is a complex and complicated summit because the proposal we have received does not meet our expectations,” said Italian Prime Minister Giuseppe Conte. Italy is one of the net contributors to the common EU pot.
The EU budget gets money from customs duties on goods entering its single market, a cut of sales tax, antitrust fines imposed by the EU on companies, and from national contributions.
It spends money on subsidies for EU farmers, on equalizing living standards across the bloc, border management, research, security and various non-EU aid programs.
Some net contributors — the “frugal four” of the Netherlands, Austria, Sweden and Denmark — want to limit the budget to 1.00% of GNI. Germany, the biggest contributor, is prepared to accept a bit more, but 1.07 is too high for Berlin.
Cohesion funds
The European Commission has proposed 1.1% and the European Parliament, which will vote on the budget, wants 1.3%. For net beneficiaries such as Poland, larger is better.
For many central and eastern European countries, EU “cohesion funds” are crucial. “The costs related to Brexit and other challenges should be more equitably distributed,” Polish Prime Minister Mateusz Morawiecki wrote in the Financial Times, adding this was not the case due to proposed deep cuts for cohesion policies and the Common Agricultural Policy (CAP).
But with less money coming in because of Brexit, some net contributors argue there is simply less to share around. Also, more money should be spent to modernize the EU economy rather than on preserving agriculture, they say.
EU leaders will discuss the idea of a tax on plastic waste that would go to EU coffers and sharing some profits from trading carbon emission permits.
The EU is also considering other taxes — on the digital economy, on flying, on financial transactions and on products made with high CO2 emissions imported into the EU.
Commission officials warn time is running out and the EU risks starting next year with no money to protect its borders, finance research and fund student exchanges, or equalize standards of living.
EU leaders to clash over money as Brexit blows hole in budget
EU leaders to clash over money as Brexit blows hole in budget
- Britain’s exit leaves 75 billion euro hole in bloc’s finances
- For next 7-year cycle, starting point for talks is 1.074% of GNI
Saudi Arabia records robust GFCF growth in Q3 2024, fueled by non-government sector investments
- Non-oil sectors grew by 4.3 percent year-on-year
- Unemployment rate dropped to 3.7 percent
RIYADH: Saudi Arabia solidified its status as a regional investment leader with a 7.4 percent year-on-year growth in gross fixed capital formation in the third quarter of 2024, led by the non-government sector.
The Ministry of Investment reported an 8.3 percent increase in the non-government division, reflecting the Kingdom’s ongoing efforts to boost private sector participation in its diversifying economy.
Government-related entities contributed to the overall GFCF growth, with a 2.3 percent increase in the third quarter of 2024.
The non-government sector’s performance aligns with Saudi Arabia’s Vision 2030 objectives, which aim to shift the economy from oil dependency by fostering a vibrant private division.
In line with these goals, the Ministry of Investment issued 3,810 investment licenses in Q3 2024, marking a significant 73.7 percent year-on-year increase.
Non-oil sectors grew by 4.3 percent year-on-year during the same period, further supporting the Kingdom’s economic diversification efforts.
Key sectors saw notable growth, including wholesale and retail trade, restaurants, and hotels rose 5.8 percent, and construction increased 4.6 percent. Transport and communication grew by 4.5 percent, and finance and real estate advanced by 4.2 percent, driven by consumer spending and a dynamic financial sector.
These expansions contributed to the Kingdom’s overall real gross domestic product growth of 2.8 percent year-on-year for the quarter, despite a marginal 0.05 percent increase in oil activities.
The real estate sector also played a pivotal role in the third quarter of 2024, with the Real Estate Price Index rising by 2.6 percent y-o-y. While residential property costs increased by 1.6 percent, commercial properties saw a more pronounced growth of 6.4 percent. However, agricultural real estate prices declined by 8.7 percent, reflecting sectoral disparities.
Complementing these trends, real estate loans by banks witnessed a 13.3 percent year-on-year increase, showcasing heightened investor interest in property development and acquisitions.
Saudi Arabia’s economic resilience is further evident in labor market improvements. The unemployment rate dropped to 3.7 percent in this period, a 0.5 percentage point decrease from the same quarter in 2023. The Saudi unemployment rate fell to 7.8 percent, a one percentage point decline year-on-year.
Global growth to accelerate amid monetary easing, recoveries: QNB
- QNB forecasts US Federal Reserve to cut rates by 75 bps and the European Central Bank by 150 bps
- It predicts growth of 2.2% in 2025, down from 2.6% in 2024
RIYADH: Global economic growth is set to accelerate in 2025 as monetary easing, US resilience, and recoveries in Europe and China drive momentum, with Southeast Asian economies benefiting from positive spillovers.
The Qatar National Bank projects a 3.2 percent global growth rate, outpacing Bloomberg’s consensus of 3.1 percent, the state’s news agency QNA reported.
In its latest commentary, QNB anticipates growth in major economies, driven by controlled inflation, eased financial constraints, and policy adjustments by central banks. Emerging markets, specifically the Association of Southeast Asian Nations economies, are set to benefit from these advancements.
The report said that analysts have consistently underestimated global economic performance, as initial projections for 2023 and 2024 fell short of realized growth by 80 and 40 basis points, respectively.
“Analysts and economists have been proving to be over pessimistic when it comes to forecasting major economies and global growth in recent years,” reported QNA.
The national bank added: “In fact, over the last two years, initial expectations for growth were 80 basis points and 40 bps below realized growth in 2023 and 2024, respectively.”
It forecasts the US Federal Reserve to cut rates by 75 bps and the European Central Bank by 150 bps.
“This should support further investment and consumption growth, as credit becomes cheaper, new investment opportunities become more attractive, and the opportunity costs of spending decrease,” it added.
In the US, QNB predicts growth of 2.2 percent in 2025, down from 2.6 percent in 2024 but still above the long-term average of 2.3 percent.
“The US economy is expected to remain on a strong footing as labor markets are resilient, productivity is growing rapidly with fast technology adoption, and households have robust balance sheets with the strongest financial position in decades,” QNB said.
Europe and China are expected to recover from extended periods of stagnation. Growth in the European area is forecast to rise from 0.7 percent in 2024 to 1.0 percent in 2025, supported by lower energy prices and a rebound in global manufacturing demand.
China’s growth is projected to increase from 4.8 percent to 5.0 percent, driven by policy easing and renewed economic momentum.
Emerging Asian nations, particularly ASEAN economies, are set to benefit significantly. “Stronger growth in China is likely to be a significant tailwind to emerging Asia in general and ASEAN economies in particular,” QNB said.
The region’s five largest markets, including Indonesia, Malaysia, the Philippines, Singapore, and Thailand, are forecasted to grow by 5.2 percent in 2025, up from 4.4 percent in 2024.
“All in all, we expect to see a moderate acceleration of global growth in 2025, with significant monetary easing, a resilient US economy, a cyclical recovery in Europe and China, and positive spillovers to ASEAN economies,” QNB said.
Saudi Arabia’s King Abdulaziz International Airport serves 49.1m passengers in 2024
- Airport’s busiest day ever recorded was on Dec. 31, 2024
- KAIA handled 47.1 million bags in 2024
RIYADH: King Abdulaziz International Airport in the Saudi port city of Jeddah served 49.1 million passengers in 2024, representing a 14 percent growth compared to the previous year.
In a statement, Jeddah Airports Co. said that this achievement marks a “historic milestone,” as KAIA handled the highest annual operational figure in the history of airports in the Kingdom in 2024.
The airport’s busiest day ever recorded was on Dec. 31, 2024, when it served more than 174,600 passengers.
December also became the busiest month in the airport’s history, with passenger numbers surpassing 4.7 million.
Strengthening the aviation sector is crucial for Saudi Arabia, as the Kingdom aims to position itself as a global tourism hub by the end of this decade.
The National Tourism Strategy of Saudi Arabia aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s gross domestic product from 6 percent to 10 percent.
KAIA also reported a significant increase in total flights last year, which exceeded 278,000, marking an 11 percent increase compared to 2023.
The press statement added that KAIA also handled 47.1 million bags in 2024, with a 21 percent growth in operational throughput.
Mazen Johar, CEO of Jeddah Airports attributed this rise in numbers to the KAIA’s accelerated operational growth, enabled by the Kingdom’s leadership and the close oversight of the Ministry of Transport and Logistics.
Saudia achieves the highest punctuality rate
The Kingdom’s national carrier, Saudia, has topped the list of global airlines in departure on-time performance with a punctuality rate of 88.82 percent in 2024, according to new data from the independent aviation tracking site Cirium.
According to a press statement, Saudia also ranked second globally in arrival on-time performance, achieving a rate of 86.35 percent.
Over the past 12 months, the airline successfully operated 192,560 flights across its network of over 100 destinations spanning four continents.
“We are proud to sustain excellence in global operational performance, which aligns with the objectives of the National Transport and Logistics Strategy and the National Aviation Sector Strategy,” said Ibrahim Al-Omar, director general of Saudia Group.
He added: “This achievement reflects the collective efforts of Saudia Group employees across all business units and highlights the integrated role played by various sectors in ensuring operational efficiency. These efforts are directly tied to enhancing and improving the guest experience.”
Saudia operates over 530 daily flights, connecting more than 100 destinations across four continents to the Kingdom with a fleet of 144 aircraft.
In the statement, the airline added that it plans to expand its fleet with 130 new aircraft in the coming years, increasing flight frequency and seat capacity to existing destinations while introducing new destinations to its network.
Saudi Arabia boosts desalinated water supply to 50% in Vision 2030 push
RIYADH: Saudi Arabia’s water sector witnessed significant shifts in 2023, with a 31 percent increase in desalinated seawater production, now comprising 50 percent of the country’s distributed water supply, up from 44 percent in 2022, official data showed.
According to the General Authority for Statistics’ latest Water Accounts report, non-renewable groundwater consumption by the agricultural sector dropped by 7 percent to 9,356 million cubic meters, compared to 10,044 million m³ in 2022.
This surge reflects the Kingdom’s strategic efforts to bolster sustainable water resources as part of its Vision 2030 agenda, aimed at reducing dependency on non-renewable groundwater.
In 2023, renewable groundwater abstraction rose to 21 percent of total groundwater use, while non-renewable abstraction fell by 6 percent, aligning with the country’s emphasis on resource preservation. Additionally, water reuse consumption increased by 12 percent to 555 million m³, signaling progress in recycling initiatives.
Agriculture remained the largest consumer of water, using 12,298 million m³, but its expenditure share accounted for only 0.5 percent of total water costs. Meanwhile, industry dominated water-related expenditures at 61.4 percent, reflecting its significant reliance on distributed water for operations.
The shift toward desalinated and renewable water sources is pivotal for Saudi Arabia, which faces acute water scarcity challenges. With groundwater resources depleting and the per capita household water consumption declining from 112.8 liters per day in 2022 to 102.1 liters in 2023, the Kingdom’s investments in desalination and reuse technologies underscore its commitment to long-term water security.
Industrial sectors saw a notable increase in water consumption, with the share of distributed water used by industries rising to 30 percent in 2023 from 22 percent in 2022. This surge mirrors the Kingdom’s push for industrial expansion under Vision 2030, which emphasizes economic diversification.
Despite these strides, non-renewable groundwater still constitutes 62 percent of the natural water supply, a decline from 68 percent in 2022 but still a dominant figure. The agriculture sector’s significant water use highlights opportunities for adopting more efficient irrigation techniques and exploring crop diversification to enhance sustainability.
Saudi Arabia’s water strategy is set to play a critical role in achieving its economic and environmental goals. As the Kingdom continues to expand its desalination infrastructure and promote water reuse, it positions itself as a regional leader in tackling water scarcity through innovation and sustainable practices.
Egypt advances nuclear program with permit for spent fuel storage
RIYADH: Egypt’s Nuclear Power Plants Authority has secured a permit to construct a spent atomic fuel storage facility at the El-Dabaa power plant, located approximately 320 km northwest of Cairo.
The NPPA plans to begin the construction of the facility in 2025. This storage solution will provide safe, dry, and scientifically advanced containment for spent nuclear fuel, with the capacity to store waste for up to 100 years, all while adhering to the highest standards of safety and environmental protection.
El-Dabaa, Egypt’s first nuclear power plant and the country’s largest energy project in decades, is being developed in collaboration with Russia’s Rosatom. The plant will house four VVER-1200 reactors, the same type as those in operation at Russia’s Leningrad and Novovoronezh plants, as well as Belarus’s Ostrovets.
In a statement issued by the NPPA, Amjad El-Wakeel, chairman of the authority, highlighted the achievement as a significant milestone in Egypt’s nuclear program. “The authority has successfully secured the permit for the construction of the spent nuclear fuel storage facility at El-Dabaa, aligning with the project’s implementation timeline,” the statement read.
The NPPA formally submitted the permit request to Egypt’s Nuclear and Radiological Regulatory Authority on June 12, 2024, accompanied by comprehensive design and technical documentation reviewed by nuclear specialists.
Following a series of productive technical meetings between NPPA and NRRA experts, the permit was granted during NRRA’s seventh session on Dec. 31, 2024.
The decision came after a successful site inspection by NRRA representatives, who visited the El-Dabaa plant from Dec.1 to 5, 2024, to assess the site’s readiness for construction.
This development highlights Egypt’s commitment to advancing its nuclear energy program in line with both national priorities and international safety standards, the statement further noted.
Located in the Matrouh governorate along the Mediterranean coast, 250 km west of Alexandria, the El-Dabaa site offers numerous strategic advantages, including access to rail and road networks, low seismic activity, and an abundant supply of cooling water.
The El-Dabaa nuclear project, which has been in the planning stages since 1954, received formal approval in 1983 and was publicly announced in 2007. Following approval from the International Atomic Energy Agency in 2010, Egypt finalized agreements with Russia in 2015. Contracts came into effect in December 2017, and construction officially commenced in July 2022.
