G7 finance chiefs to warn of global uncertainty as US debt crisis looms
G7 finance chiefs to warn of global uncertainty as US debt crisis looms/node/2302521/business-economy
G7 finance chiefs to warn of global uncertainty as US debt crisis looms
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G7 finance ministers and central bank governors attend a group photo session ahead of their meeting in Niigata, Japan, on May 12, 2023. (AP)
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US Treasury Secretary Janet Yellen, second right, and Japan's Finance Minister Shunichi Suzuki, second left, hold their meeting at the Toki Messe convention center in Niigata, Japan, on May 13, 2023. (Pool Photo via AP)
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European Central Bank President Christine Lagarde, arrives for the central bank session of the G-7 finance ministers and central bank governors meeting in Niigata, Japan, on May 13, 2023. (Pool Photo via AP)
G7 finance chiefs to warn of global uncertainty as US debt crisis looms
World Bank President David Malpass: Dstress in the world’s biggest economy would be negative for everyone
Group finance leaders are expected to set a year-end deadline for launching a new scheme to diversify global supply chains
Updated 13 May 2023
Reuters
NIIGATA, Japan: Finance leaders of the Group of Seven (G7) rich nations are expected to warn of more global economic uncertainty as they wrap up a three-day meet on Saturday overshadowed by a US debt ceiling stalemate and fallout from Russia’s invasion of Ukraine.
The gathering in the Japanese city of Niigata came as worries over a US default fueled uncertainty over the global outlook, already clouded by stubbornly high inflation and US bank failures.
“The global economy has shown resilience against multiple shocks, including the COVID-19 pandemic, Russia’s war of aggression against Ukraine, and associated inflationary pressures,” the leaders will say in a final draft of a communique seen by Reuters.
“We need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook.”
The communique is unlikely to mention the US debt ceiling stalemate, which hits markets at a time when borrowing costs are rising because of aggressive monetary tightening by US and European central banks.
US Treasury Secretary Janet Yellen said on Friday she would meet senior Wall Street bankers next week about the possibility that Washington could default on its debt for the first time since 1789.
“Clearly, distress in the world’s biggest economy would be negative for everyone,” World Bank President David Malpass told Reuters on the sidelines of the G7 meeting the same day. “The repercussions would be bad to not get it done.”
On the banking troubles, the draft communique said policymakers would tackle “data, supervisory, and regulatory gaps in the banking system.”
The grouping is expected to reiterate its condemnation of Russia’s invasion of Ukraine and pledge to strengthen monitoring of cross-border transactions between Russia and other countries.
China has also been much on the leaders’ minds, with this year’s chair, Japan, spearheading efforts to diversify supply chains and reduce their heavy reliance on the world’s second-biggest economy.
The G7 finance leaders are expected to set a year-end deadline for launching a new scheme to diversify global supply chains, the draft showed.
The new scheme envisages the G7 offering aid to low- and middle-income countries so that they can play a bigger role in supply chains for energy-related products, such as by refining minerals and processing manufacturing parts.
ISLAMABAD: Prime Minister Shehbaz Sharif on Monday called for all sectors to fulfill their tax obligations, emphasizing that economic development hinges on collective responsibility and adherence to tax laws.
The government has set an ambitious target to increase the tax-to-GDP ratio from less than 10 to 13 percent over the next three years, describing the current revenue generation level as “unsustainable.”
Faced with persistent tax evasion, authorities are implementing reforms aimed at automating the tax collection system, broadening the tax base, and enforcing strict compliance measures.
The prime minister raised the issue while chairing a meeting to review the economic situation in the country.
“Economic development is only possible when everyone fulfills their share of responsibility,” he was quoted as saying in a statement released after the meeting by his office. “All sectors must pay taxes to contribute to national progress.”
During the meeting, he noted that inflation had decreased from 38 percent to seven percent, and the interest rate had been reduced from 22 percent to 15 percent. He maintained these developments were expected to boost business activity and create new employment opportunities in the country.
The prime minister also commended the provincial administrations for their reforms in the agricultural sector, pointing out it had contributed to Pakistan’s economic stability.
Pakistan’s economy has faced significant challenges in recent years, including high inflation and fiscal deficits.
The government’s focus on tax reforms and economic stabilization measures aims to address these problems and set the country on a path toward sustainable growth.
Dubai’s annual inflation rate slows to hit lowest level in 14 months
Updated 49 min 24 sec ago
REEM WALID
RIYADH: Dubai’s annual inflation rate slowed again in October, reaching its lowest level in 14 months, official figures showed.
According to data released by the Dubai Statistics Center, the emirate’s inflation rate reached 2.4 percent in October, driven by a deeper deflation in transport prices, which fell by 10.6 percent compared to an 8 percent decline in September.
Dubai’s inflation rate has been relatively low compared to other major cities in the region, reflecting the government’s proactive measures to manage price stability and sustain economic growth.
Amid global inflationary pressures, the emirate’s economy has remained resilient, benefiting from diversified sectors such as tourism, real estate, and trade.
The data further indicated a deflation in the tobacco price category to 3.63 percent, similar to that recorded in September.
The figures also showed slower deflation in the information and communication category, which saw an annual fall of 1.92 percent, compared to a decline of 2.05 percent in September.
Recreation, sport, and culture prices witnessed a year-on-year drop of 1.74 percent in October, a smaller decrease than the 2.66 percent seen in the previous month.
The data also revealed that the housing, water, electricity, gas, and other fuels sector witnessed a price increase, with a 7.16 percent surge, compared to 7.02 percent in September.
The insurance and financial services sector also witnessed a rise in prices, with a 5.83 percent rise in October, compared to 5.20 percent in the previous month.
Prices in education, health, and food and beverages also advanced in October. Education rose by 2.94 percent, health by 1.87 percent, and food and beverages by 1.85 percent.
In comparison, September’s increases were 2.94 percent for education, 1.88 percent for health, and 1.81 percent for food and beverages.
The personal care, social protection, and miscellaneous goods and services sector, recorded a 1.67 percent jump in prices, while clothing and footwear was up 1.15 percent.
Arab stock markets up 2.14% in Q3, surpassing $4.3tn in market capitalization
Updated 6 min 14 sec ago
Miguel Hadchity
RIYADH: Arab stock markets saw a 2.14 percent growth in the third quarter of 2024, driven by strong performances in Beirut, Egypt, and Damascus, according to the Arab Monetary Fund’s composite index.
The AMF’s quarterly report highlighted annual growth of 1.5 percent in the index, reflecting gains in 13 of the 16 tracked markets, while three recorded declines.
Regional reforms, such as Egypt’s privatization initiatives and Saudi Arabia’s Vision 2030 projects, played a significant role in bolstering market activity.
The UAE’s diversification efforts also contributed to the strength of its financial markets, particularly in renewable energy and technology sectors.
The AMF said: “The positive sentiment in Arab financial markets reflects investor confidence in ongoing economic reforms and robust corporate performances.”
Top performers
The Casablanca Stock Exchange. Shutterstock
The Beirut Stock Exchange led the gains with a 29.03 percent rise, marking the highest performance among Arab exchanges despite ongoing Israeli attacks on various Lebanese regions, including the capital.
According to the World Bank, the violence in the country has caused $8.5 billion in damages and losses, including $3.4 billion in physical damages and $5.1 billion in economic losses.
BSE was followed by the Egyptian Exchange, which increased by 13.76 percent, and the Damascus Securities Exchange, with a 12.66 percent rise.
In the UAE, Dubai Financial Market recorded an 11.75 percent gain, reflecting strong investor activity.
Other markets also posted significant performances. The Casablanca Stock Exchange grew by 8.06 percent, while stock markets in Qatar and Iraq posted increases of 6.52 percent and 5.35 percent, respectively.
The Saudi Exchange, known as Tadawul, saw healthy growth of 4.68 percent, underpinned by gains in non-oil sectors aligned with Vision 2030 objectives. Algeria and Oman reported smaller but steady increases of 4.9 percent and 0.49 percent, respectively.
Despite the positive trend in most markets, three exchanges reported declines, with Bahrain’s stock market falling by 0.63 percent, Amman’s by 0.82 percent, while Palestine’s saw the steepest drop at 7.78 percent.
Market capitalization
The combined market capitalization of Arab financial markets grew by 2.54 percent in the third quarter of 2024, reaching $4.30 trillion, up from $4.19 trillion in the previous three-month period. This represented an increase of $106.55 billion.
Abu Dhabi Securities Exchange contributed the most to this growth, adding $37.30 billion, followed by Dubai Financial Market with a $21.35 billion rise. Other notable increases came from Saudi Arabia, Qatar, and Morocco.
In terms of individual exchanges, the Saudi Exchange retained its position as the largest contributor, representing 62.7 percent of the total Arab market capitalization.
The UAE’s markets, including Abu Dhabi and Dubai, collectively accounted for 18.6 percent, while Qatar, Kuwait, and Morocco contributed notable shares. The rest of the Arab markets showed varying levels of growth, with Beirut and Cairo posting sharp rises in market value.
Trading volumes
The value of traded shares across Arab markets soared by 47.46 percent in the third quarter of 2024, reaching $328.92 billion compared to $223.06 billion in the previous three-month period.
The Iraq Stock Exchange reported the highest surge in trading volumes, increasing by 67 percent. The Egyptian Exchange followed with a 51.50 percent rise, while the Saudi Exchange and Abu Dhabi Securities Exchange also saw substantial gains of 25.73 percent and 21.01 percent, respectively.
Some markets experienced a downturn in trading activity. Palestine, Algeria, and Casablanca saw declines in traded volumes, attributed to specific local economic factors.
Across the Arab region, key sectors such as real estate, technology, and financial services performed strongly, attracting both local and foreign investments.
The financial results of listed companies and the announcement of quarterly dividends boosted investor confidence.
Key factors
Arab markets demonstrated resilience despite global economic uncertainties, including fluctuating oil prices and geopolitical challenges.
The AMF reported that easing monetary policies by major central banks, such as the US Federal Reserve and the European Central Bank, improved global liquidity flows into emerging and regional markets.
The report also noted the impact of oil price volatility, which declined by approximately 15 percent during the third quarter of 2024.
While oil-exporting nations, such as Saudi Arabia and the UAE, maintained steady market performance, oil-importing nations like Egypt and Jordan benefited from reduced energy costs, alleviating inflationary pressures and supporting economic stability.
Global view
Arab stock markets’ 2.14 percent growth in the third quarter of 2024, with a total market capitalization surpassing $4.3 trillion, is relatively a great performance, especially when compared to other global equity markets.
For instance, the S&P 500 Index rose by 5.9 percent, while the Russell 2000 Index gained 9.3 percent, according to the investment consulting firm NEPC.
Internationally, emerging markets outpaced the Arab region, with the MSCI Emerging Markets Index rising by 8.7 percent and the MSCI China Index soaring by 23.5 percent.
However, the Arab markets’ performance is notable for its resilience, especially amid geopolitical tensions and fluctuating oil prices, reflecting the ongoing impact of structural reforms and regional initiatives like Saudi Arabia’s Vision 2030 and Egypt’s privatization efforts.
Outlook
The AMF emphasized the role of continued economic reforms and diversification in shaping the outlook for Arab financial markets.
“The ongoing efforts to attract foreign investment, improve market transparency, and support non-oil sectors are crucial for sustaining growth and enhancing the competitiveness of Arab financial markets,” AMF said.
Oil Updates – crude nudges up after Russia-Ukraine tensions escalate
Updated 18 November 2024
Reuters
SINGAPORE: Oil prices edged up on Monday after fighting between Russia and Ukraine intensified over the weekend, although concerns about fuel demand in China, the world’s second-largest consumer, and forecasts of a global oil surplus weighed on markets.
Brent crude futures gained 29 cents, or 0.4 percent, to $71.33 a barrel by 8:02 a.m. Saudi time, while US West Texas Intermediate crude futures were at $67.20 a barrel, up 18 cents, or 0.3 percent.
Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, causing severe damage to Ukraine’s power system.
In a significant reversal of Washington’s policy in the Ukraine-Russia conflict, President Joe Biden’s administration has allowed Ukraine to use US-made weapons to strike deep into Russia, two US officials and a source familiar with the decision said on Sunday.
There was no immediate response from the Kremlin, which has warned that it would see a move to loosen the limits on Ukraine’s use of US weapons as a major escalation.
“Biden allowing Ukraine to strike Russian forces around Kursk with long-range missiles might see a geopolitical bid come back into oil as it is an escalation of tensions there, in response to North Korean troops entering the fray,” IG markets analyst Tony Sycamore said.
Saul Kavonic, an energy analyst at MST Marquee, said: “So far there has been little impact on Russian oil exports, but if Ukraine were to target more oil infrastructure that could see oil markets elevate further.”
In Russia, at least three refineries have had to halt processing or cut runs due to heavy losses amid export curbs, rising crude prices and high borrowing costs, according to five industry sources.
Brent and WTI slid more than 3 percent last week on weak data from China and after the International Energy Agency forecasted that global oil supply will exceed demand by more than 1 million barrels per day in 2025 even if cuts remain in place from OPEC+.
China’s refinery throughput fell 4.6 percent in October from last year and as the country’s factory output growth slowed last month, government data showed on Friday.
Investors also fretted over the pace and extent of interest rate cuts by the US Federal Reserve that has created uncertainty in global financial markets.
In the US, the number of operating oil rigs fell by one to 478 last week, the lowest since the week to July 19, Baker Hughes data showed.
World Defense Show 2026 to showcase record number of Chinese companies in Riyadh
Updated 17 November 2024
Reem Walid
RIYADH: The third edition of the World Defense Show, scheduled to take place in Riyadh from Feb. 8-12, 2026, has secured a record number of participants, with more than 100 companies from China confirmed to take part.
Notably, the China Pavilion has already filled 88 percent of its exhibition space, making it the second-largest national presence at the event, surpassing even the host nation, Saudi Arabia.
This strong participation underscores the growing global appeal of the show. Since its debut, WDS has seen impressive growth, with exhibition space expanding by 54 percent between 2022 and 2026, more than doubling its size. As of now, over 50 percent of the total floor space for WDS 2026 has already been sold.
The announcement follows the successful conclusion of the second edition of WDS, which hosted 773 exhibitors from 76 countries, facilitated SR 26 billion ($6.9 billion) in deals, and attracted 106,000 trade visits.
“The significant interest and commitment from Chinese exhibitors is a testament to the prominence WDS holds in the global defense space,” said Andrew Pearcey, CEO of World Defense Show.
“Our goal is to bring together global and local stakeholders to advance networking opportunities, strengthen global knowledge-sharing, and shape the future of defense technology,” he said.
The high level of interest from Chinese firms was also evident at the 15th Airshow China in Zhuhai, held from Nov. 12-17. Senior WDS representatives attended the event to engage with potential exhibitors, offering them the opportunity to secure their space at WDS 2026, which is rapidly filling up.
