Global Developments Bottomline: Central banks are scheduled to meet on policy this week, starting with the Fed on Tues-Wed – waiting for a clear direction, financial markets are already pricing in two cuts by end of the year (the CME Group’s FedWatch tool shows traders assign an 88% probability of a cut in Jul). The BoJ and BoE meetings are likely to leave rates on hold but watch out for the fine text and signals as risks to growth remain skewed to the downside. The UNCTAD’s World Investment Report 2019 underscored the rising uncertainty as global flows of foreign direct investment fell by 13% to USD 1.3trn last year – the lowest level since the global financial crisis.
- Bahrain’s real GDP growth was up by 2.73% yoy in Q1 this year, thanks to a 9.2% growth in the oil sector amidst a 1.52% rise in the non-oil sector.
- FDI inflows into Bahrain increased by 6% to USD 1.515bn in 2018, according to the latest report “2019 World Investment Report” from UNCTAD.
- Egypt’s non-oil PMI contracted in May – falling to 48.2 – after inching up to 50.8 in Apr, driven by moderate declines in both output and new orders.
- Inflation in Egypt increased to 14.1% yoy and 1.1% mom in May (Apr: 13% yoy and 0.5% mom) as food (and non-alcoholic beverage) costs picked up by 15.1%. Core inflation slowed to 7.8% from Apr’s 8.1%.
- Egypt’s trade deficit widened by 10% yoy to USD 4.15bn in Mar 2019: exports dipped by 3.9% to USD 2.58bn while imports grew by 4.3% to USD 6.73bn.
- Egypt plans to launch the second phase of state IPOs in Sep, as planned, according to the public enterprise minister.
- Egypt will reduce its debt-to-GDP ratio to less than 93% by end-Jun and further to 80% by end of fiscal year 2020-21, according to the finance minister.
- Egypt is set to receive tenders for constructing its first dry port starting from Jul 11. The port will be set up in partnership with the private sector.
- The US has granted Iraq a 120-day waiver to import Iranian gas for its power grid, according to the US State Department.
- Fitch assigned Jordan’s long-term foreign-currency issuer default rating BB- (three notches below investment grade) with a stable outlook, citing its fiscal and economic reform track record.
- The Jordan Free and Development Zones Group announced a 50% reduction in the rental prices at the Dead Sea Development Zone in a bid to stimulate investments.
- Passenger traffic at Jordan international airport picked up by 10.6% yoy to 804,153 persons in Apr, bringing the year-to-date number to 2.73mn passengers (+7.4%).
- World Bank approved a USD 1.45bn financing package to Jordan, to promote the digital economy and address energy costs as well as stimulate inclusive growth and creating jobs.
- Kuwait’s non-oil exports increased by 17% yoy to KWD 9.4mn ($ 31mn) in May. Exports to GCC and non-GCC Arab nations amounted to KWD 2.5mn and KWD 4.4mn respectively.
- Oman’s nominal GDP crossed OMR 30bn in 2018, despite the decline in oil prices, according to a report reviewed by the Supreme Council for Planning.
- Oman initiated registration for a one-person company – a limited liability company owned by one natural or juristic person – permitted under the new Commercial Companies Law.
- The number of tourists visiting Oman surged by 34.3% yoy to 330,685 persons in Apr; GCC nationals comprised 46% of the total (+41% yoy growth).
- Oman’s excise taxes on tobacco products, energy drinks, alcohol and pork have come into effect from Jun 15: the government has called upon all firms that have a stock of the excise goods must declare its value and pay the tax in full within 15 days of the tax coming into effect.
- Qatar reduced prices of its marine and land crudes by more than 1% mom in May.
- Saudi Arabia’s PMI increased to a 17-month high of 57.3 in May (Apr: 56.8) as output expanded, output prices increased, and job creation slightly accelerated to 50.5 (Apr: 50.1). PMI has averaged 56.8 this year vs last year’s average of 53.8.
- Saudi Arabia will finalise privatization deals worth SAR 2bn (USD 533mn) before end of this year, reported Asharq al-Awsat, citing an interview with the Crown Prince.
- Saudi Tadawul will attract USD 30-40bn in inflows from the MSCI emerging markets inclusion, according to Moody’s.
- Saudi Arabia will implement a selective tax on sweetened drinks from Dec 2019, according to a statement by General Authority for Zakat and Tax.
- Saudi Aramco, with total revenues of USD 355.9bn in 2018 (+34.7% yoy), reported a net income of USD 111.1bn (46.4%).
- Saudi Arabia’s trade with the GCC (excluding Qatar) declined by 19.11% yoy to USD 5.6bn in Q1 this year: UAE was the biggest trade partner (USD 3.6bn in Q1).
- More than 390,828 work visas were issued in Saudi Arabia in Q1 this year, with 58.8% issued for individuals. Of the 12.765mn employees in the country, about 75.6% were expatriates, while among the Saudis 65.4% were men.
- OPEC oil production dropped by 236k barrels per day to 29.87mn bpd in May – the lowest level in 5 years. However, from the region Kuwait and UAE increased its oil output by 13k and 3k bpd while Saudi Arabia reduced by 76k bpd.
- According to UNCTAD’s latest World Investment Report 2019, FDI flows to West Asia grew by 3% to USD 29bn last year – though inflows were only one-third of the 2008 peak of USD 85bn, the growth halted an almost continuous 10-year downward trend.
- UAE’s PMI rose to 59.4 in May (recording the fastest pace since Oct 2014) from 57.6 the month before. Both output and new orders picked up to 69.4 (Apr: 65.3) and 69.5 (64.6) respectively while the employment sub-index nudged down to 50.1. New export orders rose at the fastest pace in the near 10-year survey history, spurred by new business from Saudi Arabia and Oman.
- Dubai’s non-oil trade grew by 7% to AED 339bn ($ 92.3bn) in Q1 2019. Exports were up 30% yoy after contracting in 2018, while re-exports grew at 7% (slowest rate of growth since Q3 2017).
- New business licenses issued in Dubai increased by 35% yoy to 9489 in Jan-Apr 2019. Total FDI inflow into Dubai touched AED 22.2bn in Q1 vs AED 7.3bn in Q1 2018.
- DIFC enacted two new laws: the new Insolvency Law and Regulations – which introduces a new debtor in possession bankruptcy regime, and the new DIFC Employment Law – which address key issues such as paternity leave, sick pay and end-of-service settlements.
- The UAE Cabinet, in an attempt to promote the role and participation of Emirati youth, issued a decision that at specifies at least one Emirati under the age of 30 must be included in the boards of directors of government entities, institutions and companies.
- The UAE Cabinet approved a National Strategy for Wellbeing 2031: a framework includes enhancing people’s wellbeing by promoting healthy and active lifestyles, promoting good mental health and adopting positive thinking.