IMF projects 4% growth rebound in Middle East and North Africa next year

IMF projects 4% growth rebound in Middle East and North Africa next year
Non-oil growth in the Gulf Cooperation Council region has mostly outperformed overall growth, according to the IMF. Supplied
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Updated 31 October 2024
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IMF projects 4% growth rebound in Middle East and North Africa next year

IMF projects 4% growth rebound in Middle East and North Africa next year

DUBAI: Growth in the Middle East and North Africa region is expected to rebound to 4 percent next year, but will hinge on a phase out of oil production cuts and headwinds subsiding, including from conflicts, the International Monetary Fund said on Thursday.

Growth in the region will remain “sluggish” at 2.1 percent in 2024, according to the IMF’s latest Regional Economic Outlook, launched in Dubai, lower than earlier projections as geopolitical and macroeconomic factors weigh.

The IMF cautioned that risks to the outlook for the whole region, including the Caucasus and Central Asia, “remain tilted to the downside,” and called for an acceleration of structural reforms, including in governance and labor markets, to lift prospects for medium term growth.

For 2024, the MENA growth estimate has been revised downwards by 0.6 percent from April’s report, mainly due to the extension of the Israel-Hamas conflict and further extensions of OPEC+ voluntary oil production cuts, Jihad Azour, the IMF’s director for the Middle East and Central Asia department, said in an interview.

He added that the “good news” was that inflation was gradually being brought under control across the region, and expected to average the 3 percent target rate in 2024, with the exception of Egypt, Iran and Sudan.

However, the outlook varies considerably across the region, with oil exporting countries expected to cope better with potential risks, supported by “strong” non-oil sector growth, Azour said.

Amid lower oil prices and lower oil production this year, non-oil growth in the Gulf Cooperation Council region has mostly outperformed overall growth as government led investment programs help drive domestic demand. Saudi Arabia, Kuwait, the UAE Qatar, Bahrain and Oman are part of the GCC.

Middle East and North Africa oil importers remain more vulnerable to ongoing conflicts and high financing needs.

“Even as these issues gradually abate, uncertainty remains high and structural gaps will likely hold back productivity growth in many economies over the forecast horizon,” the IMF report said.

The IMF has approved $13.4 billion in new funding to Middle East and Central Asian countries since January 2024, including for programs in Egypt, Jordan and Pakistan. 


Saudi Aramco raises February LPG prices

Saudi Aramco raises February LPG prices
Updated 5 sec ago
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Saudi Aramco raises February LPG prices

Saudi Aramco raises February LPG prices

RIYADH: Saudi Aramco has increased the official selling prices for propane and butane for February, according to a statement released on Thursday.

The new prices are set at $635 per tonne for propane and $625 per tonne for butane, reflecting a $10 rise for each product compared to the previous month.

Both propane and butane are types of liquefied petroleum gas, commonly used for heating, vehicle fuel, and as feedstock in the petrochemical industry. Although similar, these gases have different boiling points, making them suitable for a range of specific applications.

Aramco's OSPs for LPG serve as important benchmarks for contracts supplying these products from the Middle East to the Asia-Pacific region.

Propane demand typically peaks in the winter months, as it is a key source of home heating, and this seasonal increase often drives up prices.

The fluctuations in price are a direct reflection of supply and demand dynamics, with colder weather pushing prices higher in line with greater consumption.


Saudi stock market among top regional performers amid upward trend 

Saudi stock market among top regional performers amid upward trend 
Updated 30 January 2025
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Saudi stock market among top regional performers amid upward trend 

Saudi stock market among top regional performers amid upward trend 

RIYADH: The Saudi stock market was among the Arab region’s top performers in December, with the Tadawul index rising 3.39 percent amid improved liquidity and investor confidence, a new report showed. 

At the end of the final month of 2024, TASI closed at 12,037 points, with an average daily trading value of SR5.2 billion ($1.3 billion), bringing the total monthly trading value to SR119.6 billion, according to the Arab Monetary Fund. 

Dubai Financial Market led the regional surge with its DFMGI index rising by 6.42 percent, making it the best-performing exchange during the month. It was followed by the Palestinian and Iraqi stock exchanges, which registered gains of 4.85 percent and 4.14 percent, respectively. 

This helped the AMF’s composite index for Arab financial markets post a 1.03 percent increase in December, as most regional stock markets ended the year on a positive note. The market rally was fueled by improved investor sentiment, easing inflationary pressures, and monetary policy adjustments across several economies. 

Arab markets largely followed the performance of emerging markets. The MSCI Arab Index, which tracks the performance of stock exchanges in the region, increased by 3.46 percent. 

In contrast, global markets showed mixed results. The Nikkei 225 rose by 4.41 percent, while indices such as the FTSE 100 and Dow Jones recorded declines of 1.38 percent and 5.27 percent, respectively.  

Other key regional markets that saw growth included the Abu Dhabi, Kuwait, and Qatar stock exchanges. 

Meanwhile, some markets saw declines, with the Damascus Securities Exchange registering the sharpest drop of 7.64 percent, followed by the Bahrain Bourse at 2.27 percent and the Egyptian Exchange at 1.66 percent.  

In terms of market capitalization, Arab exchanges witnessed a 2.96 percent increase by the end of December, bringing the total market value to approximately $4.4 trillion. Tadawul played a major role in this growth, contributing 1.47 percentage points to the overall market capitalization increase. 

The Beirut Stock Exchange recorded the largest percentage gain at 22.37 percent in market capitalization, followed by Dubai Financial Market at 13.54 percent and the Palestine Stock Exchange at 5.35 percent. 

On the other hand, the Damascus Securities Exchange suffered the most significant decline at 7.40 percent, with the Bahrain and Casablanca exchanges also experiencing contractions.  

Trading activity in the Arab financial markets also saw a sharp increase, with the total value of traded stocks rising by 25 percent compared to November levels. 

The Egyptian Exchange led in trading volume growth, with an increase of 116.74 percent, while the Casablanca and Tunis stock exchanges recorded gains of 199.83 percent and 330.59 percent, respectively. 

However, not all markets shared this momentum, as some, including the Damascus and Abu Dhabi stock exchanges, recorded declines in traded volumes.  

Monetary policy adjustments played a crucial role in market performance. Several central banks in Arab and global markets eased their monetary policies in December, further supporting market liquidity. 

The US Federal Reserve’s decision to cut interest rates led to similar actions in Saudi Arabia, the UAE, Qatar, and Bahrain, among others. The Turkish and Argentine central banks also made significant rate cuts to address domestic economic conditions. 

The overall monetary easing environment contributed to strengthening investor sentiment and boosting equity market performance, the report said. 


Middle East carriers witness 13% cargo demand growth in 2024: IATA

Middle East carriers witness 13% cargo demand growth in 2024: IATA
Updated 30 January 2025
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Middle East carriers witness 13% cargo demand growth in 2024: IATA

Middle East carriers witness 13% cargo demand growth in 2024: IATA
  • Globally, total air cargo demand surged by 11.3 percent in 2024 compared to the previous year
  • International routes witnessed several issues, including attacks on maritime vessels in the Red Sea

RIYADH:  Middle Eastern air carriers saw a 13 percent increase in air cargo demand in 2024 compared to the previous year, driven by the e-commerce boom and various ocean freight restrictions, according to an analysis.

In its latest report, the International Air Transport Association said airlines in the Middle East region handled 13.6 percent of the cargo transported internationally in 2024. 

The growth of the Middle East’s aviation sector is closely tied to the region’s economic diversification efforts, particularly in Saudi Arabia, which seeks to reduce its reliance on oil revenues. As part of its National Aviation Strategy, the Kingdom aims to handle 4.5 million tonnes of cargo annually by 2030 and expand its network with over 250 direct destinations from the country’s airports to transnational markets.

Globally, total air cargo demand, measured in available cargo tonne-kilometers, surged by 11.3 percent in 2024 compared to the previous year.

International routes witnessed several issues, including attacks on maritime vessels in the Red Sea, which saw the number of ships using the Suez Canal drop 22 percent in 2023-24 compared to the previous year. 

Due to escalating tensions in waterways, several shipping companies diverted their vessels around the Cape of Good Hope, which increased delivery times by 10 days or more on average.

“Air cargo was the standout performer in 2024 with airlines moving more air cargo than ever before. Importantly, it was a year of profitable growth. Demand, up 11.3 percent year-on-year, was boosted by particularly strong e-commerce and various ocean shipping restrictions,” said Willie Walsh, director-general of IATA. 

He added: “This, combined with airspace restrictions which limited capacity on some key long-haul routes to Asia, helped to keep yields at exceptionally high levels. While average yields continued to soften from peaks in 2021-2022 they averaged 39 percent higher than 2019.”

According to the latest analysis, Middle Eastern carriers’ air cargo capacity expanded by 5.5 percent in 2024 compared to the previous year. 

In December, air carriers in the region witnessed a cargo demand growth of 3.3 percent year on year, while capacity rose by 0.2 percent. 

APAC region driving growth

According to the report, airlines operating in the Asia-Pacific region witnessed a 14.5 percent year-on-year growth in air cargo demand, with capacity rising by 11.3 percent during the same period. 

APAC airlines also handled 34.2 percent of global air cargo in 2024.

European carriers experienced an 11.2 percent year-on-year demand growth in 2024, while capacity rose 7.8 percent. 

Air carriers in Europe also handled 21.5 percent of the total air cargo. 

Latin American airlines saw a 12.6 percent surge in demand, handling 2.9 percent of global air cargo last year.

African airlines saw an 8.5 percent year-on-year demand boost for air cargo in 2024. 

The capacity of air carriers in Africa also rose by 13.6 percent in 2024 compared to the previous year.  

North American carriers saw 6.6 percent year-on-year demand growth for air cargo in 2024 — the lowest of all regions. 

Future outlook

According to IATA, global air cargo demand growth is expected to expand by 5.8 percent in 2025. 

“Economic fundamentals point to another good year for air cargo — with oil prices on a downward trajectory and trade continuing to grow. There is no doubt, however, that the air cargo industry will be challenged to adapt to unfolding geopolitical shifts,” said Walsh. 

“The first week of the Trump administration demonstrated its strong interest in using tariffs as a policy tool that could bring a double whammy for air cargo — boosting inflation and deflating trade,” he added.


Oil Updates — crude wavers as markets await clarity on Trump tariffs on Canada, Mexico

Oil Updates — crude wavers as markets await clarity on Trump tariffs on Canada, Mexico
Updated 30 January 2025
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Oil Updates — crude wavers as markets await clarity on Trump tariffs on Canada, Mexico

Oil Updates — crude wavers as markets await clarity on Trump tariffs on Canada, Mexico

TOKYO: Oil prices were little changed on Thursday as markets braced for threatened tariffs by US President Donald Trump on Mexico and Canada, the two largest suppliers of crude oil to the US, and awaited a meeting of OPEC+ producers.

Brent crude futures were down 7 cents, or 0.1 percent, at $76.51 a barrel by 7:11 a.m. Saudi time. US crude futures were little changed at 2 cents up, or 0.03 percent, to $72.64. US crude futures had settled at their lowest price this year on Wednesday.

Trump still plans to make good on his promise to impose tariffs on Canada and Mexico on Saturday, White House spokeswoman Karoline Leavitt told reporters on Tuesday.

Trump’s nominee to run the Commerce Department, Howard Lutnick, said on Wednesday that Canada and Mexico can avoid the tariffs if they act swiftly to close their borders to fentanyl, while vowing to slow China’s advancement in artificial intelligence.

On the demand front, crude oil stockpiles in the US rose by 3.46 million barrels last week, roughly in line with analysts’ estimate for a rise of 3.19 million barrels, as winter storms that swept the country last week hit demand.

On the supply side, crude oil exports from Russia’s western ports in February are set to fall by 8 percent from the January plan as Moscow boosts refining, traders said and Reuters calculations showed, after the latest US sanctions squeezed crude exports.

Investors are also looking ahead to a ministerial meeting by the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, scheduled for Feb. 3.

The OPEC+ group of leading oil producers is set to discuss Trump’s efforts to raise US oil production and take a joint stance on the matter, Kazakhstan said on Wednesday. Russia is also a member of the OPEC+ group.

Trump has publicly called on OPEC to lower oil prices, saying doing so would end the conflict in Ukraine. He has also set up an agenda of maximizing the US oil and gas production, already the world’s largest.
However, analysts believe a price war between the US and OPEC+ is unlikely as it may hurt both.

“A price war with the US would involve OPEC+ producers maximizing their output to undercut prices and drive shale production into decline,” analysts at BMI, a Fitch Group division, said in a note.

They predict Brent crude oil prices may go down below $50 as OPEC+ can deploy over 5 million barrels of oil per day in its spare capacity, prompting a fall in the US shale oil production along the prices. 


Saudi Arabia’s real GDP grows 4.4%: GASTAT

Saudi Arabia’s real GDP grows 4.4%: GASTAT
Updated 30 January 2025
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Saudi Arabia’s real GDP grows 4.4%: GASTAT

Saudi Arabia’s real GDP grows 4.4%: GASTAT

RIYADH: Saudi Arabia’s real gross domestic product saw an annual expansion of 4.4 percent in the fourth quarter of 2024, marking its highest growth in two years, official data showed.

According to flash estimates from the General Authority for Statistics, the Kingdom’s non-oil activities grew by 4.6 percent year on year in the three months to the end of December, reflecting ongoing efforts to diversify the economy.

The report also noted that oil activities rose by 3.4 percent in the fourth quarter compared to the same period in 2023, while government activities expanded by 2.2 percent.

Saudi Arabia’s GDP growth aligns with the broader Middle East trend, where countries are steadily advancing economic diversification.

The UAE’s central bank projects 4 percent GDP growth in 2024, while Bahrain and Qatar reported year-on-year expansions of 2.1 percent and 2 percent, respectively, in the third quarter. Qatar’s full-year GDP grew by 1.7 percent, driven by a 1.9 percent rise in non-hydrocarbon activities.

Reflection on the Saudi figures, GASTAT said: “The results also showed that seasonally adjusted real GDP increased by 0.3 percent in the fourth quarter of 2024 compared to the third quarter of the same year.” 

Strengthening the non-oil sector remains a key goal under the Kingdom’s Vision 2030 as efforts continue to reduce the dependence on oil revenues and drive sustainable economic growth.

Compared to the third quarter, non-oil activities in the Kingdom grew by 1.3 percent, while government activities rose by 0.3 percent. However, oil activities witnessed a quarterly decline of 1.5 percent.

For the full year 2024, Saudi Arabia’s GDP expanded by 1.3 percent compared to 2023. This increase was primarily driven by a 4.3 percent rise in non-oil activities, underscoring the Kingdom’s focus on economic diversification.

Government activities recorded a 2.6 percent annual increase, while oil activities contracted by 4.5 percent due to OPEC+ output cuts, which have impacted production levels.

Earlier this month, the International Monetary Fund projected that Saudi Arabia’s economy will grow by 3.3 percent in 2025 and 4.1 percent in 2026. These numbers reflect shifts in the global economic landscape, with oil production adjustments playing a key role in influencing near-term growth expectations.

A December report from Mastercard Economics also highlighted the robust expansion of Saudi Arabia’s non-oil sector. The analysis forecast that the Kingdom’s GDP will grow by 3.7 percent year on year in 2025, largely driven by increased non-oil activities.

The Mastercard report added that economic diversification efforts will remain a priority in 2025, with the government leveraging its strong fiscal position to finance infrastructure development and new investment opportunities.