CAIRO: The International Monetary Fund said it had reached a staff-level agreement with Egypt for a $12 billion three-year funding facility to support a government reform program aimed at plugging a funding gap and rebalancing the currency market.
The deal is subject to approval by the IMF executive committee which is expected to consider Egypt’s request for an Extended Fund Facility (EFF) in the coming weeks.
“Egypt is a strong country with great potential but it has some problems that need to be fixed urgently. The EFF supports the authorities’ comprehensive economic reform program as... approved by the parliament,” Chris Jarvis, the head of the IMF mission in Cairo, said in a statement.
“The program aims to improve the functioning of the foreign exchange markets, bring down the budget deficit and government debt, and to raise growth and create jobs...”
Egypt’s dollar-denominated 2025 bond rose to trade at its highest level since end-Sept 2015 after the IMF deal was announced.
Egypt announced on July 26 it was close to agreeing an IMF lending program worth $12 billion to ease its deficit and restore market stability. Prime Minister Sherif Ismail asked his team to complete talks during a two-week visit by an IMF staff team that arrived in Cairo on July 30.
Thursday’s announcement was the first IMF confirmation of the duration and size of Egypt’s potential funding facility.
Egypt’s economy has been struggling since a mass uprising in 2011 ushered in political instability that drove away tourists and foreign investors, both major earners of foreign currency. Foreign reserves have halved to about $15.5 billion since then.
The dollar shortage has forced Egypt to introduce capital controls that have hit trade and growth, while downward pressure on the pound has mounted on speculation that the central bank will need to devalue for the second time this year.
Speaking at a news conference, Jarvis said the aim of the foreign exchange policy was to end hard currency shortages.
“Moving to a flexible exchange rate regime will strengthen competitiveness, support exports and tourism and attract foreign direct investment. This would foster growth and jobs and reduce financing needs,” Jarvis said in his statement. He did not say if Egypt had committed to easing its exchange rate policy as part of the deal.
The government has already begun implementing its reform program, including plans for a value added tax (VAT) and subsidy cuts. It announced electricity price hikes this week.
Jarvis said the government recognized the need for “quick implementation of economic reforms for Egypt to restore macroeconomic stability and to support strong, sustainable, job-rich growth.”
IMF agrees $12 billion 3-year funding deal with Egypt
IMF agrees $12 billion 3-year funding deal with Egypt
WEF panel explores ways to drive economic growth in uncertain times
DUBAI: The World Bank Group’s forecast suggests that between 2024 and 2026, countries that collectively account for more than 80 percent of the world’s population and global GDP will still be growing more slowly than they did in the decade before COVID-19.
Moreover, new trade barriers introduced have nearly tripled since 2019, according to the UN.
In this environment, how do global economies find growth? That was the question being explored by a World Economic Forum panel “Finding Growth in Uncertain Times” in Davos.
Moderated by WEF President and CEO Borge Brende, the panel featured Ngozi Okonjo-Iweala, director-general of the World Trade Organization; David Rubenstein, co-founder and co-chairman of global investment firm Carlyle; Marcus Wallenberg, chairman of Swedish bank Skandinaviska Enskilda Banken and Khaldoon Khalifa Al-Mubarak, group CEO, Mubadala Investment Company.
Okonjo-Iweala laid out four requirements for growth: maintaining or restoring macroeconomic stability and good management including fiscal consolidation; openness and predictability of global markets, which requires strengthening resilience in economies; “re-globalization,” which means decentralizing and diversifying supply chains; and lastly, adopting technology and AI, which will increase productivity and lower trade costs in a way that allows for double-digit growth in trade from now until 2040.
There are many questions about US policy with President Donald Trump stepping into office on Monday. Rubenstein addressed some of these questions and concerns saying that in just a day, Trump has issued several executive orders.
“I think you will see him (Trump) doing a lot of fairly robust things that might not have been anticipated before,” he said.
He went on to explain some of the new administration’s policies, such as tax cuts, aimed at spurring growth; imposing tariffs as a negotiation tool for greater trade cooperation; and increasing production of natural gas and oil, which is already at its highest in the country.
“The biggest impediments to growth,” not just for the US but globally, are the wars in the Middle East, Rubenstein said.
He added: “The US’s problems are not the biggest problems. The biggest challenge for economic growth around the world is the Global South, which, because of the challenges of the last 15 years went further behind the developed markets than desired.”
The US is feeling “fairly bullish” about the economy for the near future, and so, it has to ensure it is helping out other countries in terms of wars and access to technology, Rubenstein added.
Europe, on the other hand, is lagging behind with weak growth forecasts. This is partly due to Europe not being as competitive, according to Wallenberg.
He said: “Over the years, Europe has tended to perhaps not understand our competitive situation and the strategic position that we find ourselves (in) with a very strong United States and a very strong China, and therefore our competitiveness has been challenged.”
Wallenberg pointed out that Europe is a rather larger market, which means there is potential for scale. But first, it needs to revive its confidence as well as that of its consumers along with “a singular capital market that is unified” and “a number of institutions that can provide more risk capital,” among other things.
“We have all the ingredients to make it happen,” he said. “Now, we just have to stand up and get it done.”
Turning to the Middle East, Mubadala’s Al-Mubarak underlined the importance of sovereign wealth funds.
Because they are “highly capitalized” and have a “high liquidity position” as well as the ability to think and invest long term, sovereign funds are becoming more and more important to support global growth, he said.
He explained why the UAE is a good example of a growth story. For example, its capital Abu Dhabi was rated the safest city in the world for the seventh year running; it ranked fifth globally in AI competitiveness according to a Stanford study; and it recorded the largest inflow of high-net-worth individuals globally in 2024, he said.
The UAE sets the example of “growth in this new world,” particularly “how to create growth and diversify from one sector to a multi-faceted economy,” Al-Mubarak said.
Closing Bell: Saudi Arabia’s Tadawul ends slightly lower at 12,370
RIYADH: Saudi Arabia’s Tadawul All Share Index closed slightly lower on Tuesday, dipping 0.08 percent, or 9.91 points, to settle at 12,369.63.
Trading turnover on the main market reached SR6.92 billion ($1.84 billion), with 133 stocks advancing and 97 declining.
The Kingdom’s parallel market, Nomu, also shed 27 points to close at 31,317.97, while the MSCI Tadawul Index slipped 0.17 percent to 1,549.08.
The best-performing stock on the main market was Rasan Information Technology Co., with its share price rising 9.99 percent to SR88.10.
Other top gainers included Saudi Cable Co., which rose 9.97 percent to SR128, and Walaa Cooperative Insurance Co., up 6.24 percent to SR22.80.
Conversely, ACWA Power Co.’s share price fell 3.49 percent to SR420.
On the announcements front, Al Jouf Cement Co. said it has signed a SR38 million agreement with Mohammed Shahi Al-Ruwaili Contracting to export various types of cement and clinker to Syria.
According to a statement on Tadawul, the contract will be effective from Feb. 1 to Feb. 28, 2026.
The company noted that the agreement's financial impact will be reflected in its performance from the first quarter of 2025 through the first quarter of 2026.
Al Jouf Cement Co.’s share price rose 1.42 percent to SR11.46.
Scientific and Medical Equipment House Co., known as Equipment House, announced securing a SR105.07 million tender to maintain and repair medical devices and equipment in hospitals and health centers under the Riyadh First Health Cluster.
According to a Tadawul statement, the contract covers King Salman Hospital, Al Iman Hospital, and Imam Abdulrahman Al Faisal Hospital, as well as the Convalescent Hospital, and various dental complexes.
The company noted that the financial impact of the deal will be reflected starting in the second quarter of this year.
Scientific and Medical Equipment House Co.’s share price edged up by 0.19 percent to SR52.20.
Aldrees Petroleum and Transport Services Co. reported a net profit of SR338 million for 2024, marking a 20.37 percent increase compared to the previous year.
The company attributed the profit growth to a 30 percent rise in revenues driven by stronger sales in its petrol and transport segments.
Aldrees, listed on Saudi Arabia’s main index, also announced that its shareholders recommended a cash dividend of SR1.5 per share for 2024.
The company’s share price rose 4.20 percent to close at SR129.
Crude falls on US tariff reprieve, stronger dollar
LONDON: Oil prices fell on Tuesday as investors assessed US President Donald Trump’s plans to apply new tariffs later than expected while boosting oil and gas production in the US.
Brent crude futures were down $1.42, or 1.77 percent, to $78.73 per barrel at 1116 GMT. US West Texas Intermediate crude futures were down by $1.97, or 2.53 percent, at $75.91. There was no settlement in the US market on Monday due to a public holiday.
Pressuring prices on Tuesday was a stronger US dollar, as its strengthening makes oil more expensive for holders of other currencies.
Trump did not impose any sweeping new trade measures right after his inauguration on Monday, but told federal agencies to investigate unfair trade practices by other countries.
The US president also said his administration would “probably” stop buying oil from Venezuela.
Trump also promised to refill strategic reserves, a move that could be bullish for oil prices by boosting demand for US crude oil.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea. Yemen’s Houthis on Monday said they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
Aramco chief expects additional oil demand of 1.3m bpd this year
- Asked about US sanctions on Russian crude tankers, he said the situation was still at an early stage
DAVOS, Switzerland: Saudi oil giant Aramco’s Chief Executive Amin Nasser said on Tuesday he sees the oil market as healthy and expects an additional 1.3 million barrels per day of demand this year.
Speaking to Reuters on the sidelines of the World Economic Forum in Davos, Nasser was responding to a question on the impact of US President Donald Trump’s energy decisions, which could increase US hydrocarbon output.
Oil demand this year will approach 106 million barrels per day after averaging about 104.6 million barrels per day in 2024, he said.
“We still think the market is healthy ... last year we averaged around 104.6 million barrels (per day), this year, we’re expecting an additional demand of about 1.3 million barrels ... so there is growth in the market,” he said.
Asked about US sanctions on Russian crude tankers, he said the situation was still at an early stage.
“If you look at the impacted barrels, you’re talking about more than 2 million barrels,” he said. “We will wait and see how would that translate into tightness in the market, it is still in the early stage.”
Asked if China and India have sought additional oil volumes from Saudi Arabia on the back of the sanctions, Nasser said Aramco is bound by the levels the kingdom’s energy ministry allows it to pump. Saudi Arabia has been pumping at about three quarters of its output capacity, as part of agreements with OPEC+ to support the market.
“The kingdom and the Ministry of Energy is always looking at balancing the market. They take that into account when they give us the target of how much we should put in the market,” he said.
Aramco is working with MidOcean, an LNG firm in which it took a 51 percent stake, and “looking at expanding our position globally in LNG,” without giving details, Nasser said.
Saudi economy minister speaks on global growth, US economic policies, Vision 2030
- Kingdom looking ‘forward’ to ‘dialogue’ with new US administration, says Faisal Alibrahim
- More global economic integration vital to ‘protect the flow of trade, goods and services’
DUBAI: Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim on Tuesday said the Kingdom would continue to assess shifting US economic policies as it eyes more integration to help protect global trade.
Alibrahim made the comments during a panel discussion at the World Economic Forum in Davos.
Moderator Steve Sedgwick asked Alibrahim about US President Donald Trump’s plan, announced during his inauguration on Monday, to maximize America’s oil and gas production.
“Do these American policies, as spoken about by the 47th US president, pose a direct threat to Saudi Arabia, which has been a reliable supplier of oil to the US for decades?” asked Sedgwick.
Alibrahim said: “The Kingdom is more integrated in the global economy, more of the stuff we do at home impacts not just the region but the global economy and vice versa.”
However, the minister said it would require time to understand what the economic policy of the Trump administration would look like in order to understand its impact.
“We’re always assessing what policies would look like and how we need to respond, but we’re relying on dialogue and continued mutual benefit and value,” he said.
“With the US, we’ve had a longstanding, strong relationship that spanned eight decades, regardless of which administration was in office, and we look forward to continuing the discussion with this administration.”
“It’s time for more economic integration regionally and more clear bilateral arrangements or agreements that help protect the flow of trade, goods and services.”
Alibrahim said that it would take almost a year to see the impact of such new US policies.
“Whether it’s deregulation, industrial policy, trade policy, I think it’ll take us a quarter or two to understand what that would look like exactly, what the impact would be. Maybe then in a year to understand exactly what that would mean for the global economy.”
“Regardless, I think whatever the US economic policy would look like would not just be something that would impact the global economy today (or) in the near future. It’ll probably be the seeds towards a long-term restructure in the global economy.”
The panelists at Tuesday’s session discussed the global growth rate noting that it is projected at 3.3 percent in 2025, compared to around 4 percent over the past 30 years.
The minister said global growth would be boosted by building the right social capabilities and investing in human capital.
“I think we’re shifting to a new form of globalization ... the sooner we know what that looks like, the more clear it’ll be what the pathways for growth are going to be,” he said.
Alibrahim said universities in the Kingdom are gathering data on Saudi Arabia’s economy to help “fire up new engines of growth or reinvigorate all sectors.”
He added: “Vision 2030 is an example of leveraging on all of these opportunities, (and) also trying to be a voice for shaping a more prosperous future.”
He also highlighted the transformative initiatives of the Kingdom’s Vision 2030 to diversify the economy, foster global partnerships, and strengthen the private sector.
Alibrahim said Vision 2030 “is a long-term restructuring of our economy so that we’re more resilient and more ready for future growth.”
