World Bank Official: Saudi Arabia Takes Economic Diversification Agenda Seriously

A session of the International Monetary Fund (IMF) and World Bank meetings in the Moroccan city of Marrakesh (Reuters)
A session of the International Monetary Fund (IMF) and World Bank meetings in the Moroccan city of Marrakesh (Reuters)
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World Bank Official: Saudi Arabia Takes Economic Diversification Agenda Seriously

A session of the International Monetary Fund (IMF) and World Bank meetings in the Moroccan city of Marrakesh (Reuters)
A session of the International Monetary Fund (IMF) and World Bank meetings in the Moroccan city of Marrakesh (Reuters)

The World Bank expects a sharp decline in the growth of the economies of the countries of the Middle East and North Africa region this year, reaching 1.9 percent from 6 percent last year, driven by reduced oil production, tight global financial conditions, and high inflation.

These forecasts were issued before the military escalation between Israel and Gaza, which will have repercussions on the economy at the regional and global levels. Bloomberg expects global growth to decline to 1.7 percent (from 1.9 percent according to recently issued International Monetary Fund estimates).

In an interview with Asharq Al-Awsat on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank in Marrakesh, World Bank’s chief economist for the Middle East and North Africa region, Roberta Gatti, said that the region witnessed exceptional growth last year, which was the highest in about 15 years, driven by oil prices and the rise in oil exports after the Russian-Ukrainian war. In 2023, growth declined starkly, as demand for oil was below the expectations.

Hence, the largest decline in growth rates was registered in the oil-exporting countries of the Gulf Cooperation Council, where real GDP growth is expected to reach 1 percent in 2023, down from 7.3 percent in 2022, as a result of oil production cuts and lower oil prices. As for oil-exporting developing countries, growth is expected to decline from 4.3 percent in 2022 to 2.4 percent in 2023.

According to Gatti, Saudi Arabia recorded a significant decline in the oil sector, in parallel with a remarkable growth in non-oil activities by about 3.7 percent.

In this context, the World Bank official noted that Saudi Arabia “takes the economic diversification agenda seriously”, as it plans its expenditures and its financial budget in accordance with a fixed price rate for oil based on around $70.

Gatti noted that other countries in the region, such as Egypt and Tunisia, whose economies were already affected by the pandemic, were suffering severely due to high inflation rates. Thus, higher interest rates would make the economic situation more complex, as they lead to increased debt service, she remarked.

On Egypt, the World Bank chief economist said that adopting a flexible exchange rate was is an essential step for the country, in parallel with the need for financial and structural policies that are consistent with the reforms requested by the IMF.

The most important way to reduce the high public debt to GDP is to maximize the role of the private sector with the aim of achieving greater growth, she stressed.

Gatti went on to say that the World Bank’s vision of the labor market in the Middle East and North Africa region was closely linked to growth and social stability. She explained that countries must think about doubling their resistance to shocks and finding the necessary mechanisms to expand financial space, as World Bank figures show that the MENA region has the highest incidence of climate-related disasters compared to other countries in the world.



Gold Eases from Record Peak on Profit-taking; Trump's Tariffs in Focus

Gold bars at a gold shop in Bangkok, Thailand, 01 April 2025. EPA/RUNGROJ YONGRIT
Gold bars at a gold shop in Bangkok, Thailand, 01 April 2025. EPA/RUNGROJ YONGRIT
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Gold Eases from Record Peak on Profit-taking; Trump's Tariffs in Focus

Gold bars at a gold shop in Bangkok, Thailand, 01 April 2025. EPA/RUNGROJ YONGRIT
Gold bars at a gold shop in Bangkok, Thailand, 01 April 2025. EPA/RUNGROJ YONGRIT

Gold dipped on Thursday as traders locked in profits after prices hit a record high, following a rush to safe-haven assets triggered by US President Donald Trump's aggressive import tariffs, which escalated the already intense global trade war.

Spot gold was down 0.4% at $3,122.1, as of 0710 GMT. Earlier in the session, bullion hit an all-time high of $3,167.57.

US gold futures fell 0.7% to $3,145.00.

Trump unveiled on Wednesday a 10% baseline tariff on all imports to the US, and higher duties on dozens of countries, including some of its biggest trading partners, deepening a trade war that has rattled global markets, Reuters said.

The reciprocal tariffs do not apply to certain goods, including gold, energy and "certain minerals that are not available in the US," according to a White House fact sheet.

One of the factors supporting gold was "the slowdown that tariffs are likely to cause the US economy, raising the prospects of future rate cuts," Capital.com's financial market analyst Kyle Rodda said.

The Trump administration confirmed that the 25% global car and truck tariffs will take effect on April 3, as planned, and duties on automotive parts imports will be launched on May 3.

Gold is in "a pure momentum trade, where bulls who were left for dust are agonizing on the side line, eager for even the smallest of dips, and until we see a volatile shakeout big enough to stun bulls and bears, the momentum trade could continue higher," said Matt Simpson, a senior analyst at City Index.

Gold, a hedge against political and financial instabilities, has surged more than 19% year-to-date, mainly driven by tariff jitters, rate- cut possibilities, geopolitical conflicts, and central bank buying.

"There's also some front running going on amongst traders who anticipate (Trump's) policies will drive central banks to park their reserves in gold rather than US dollar-denominated assets," Rodda said.

Market awaits US non-farm payrolls report due on Friday for clues into the Federal Reserve's policy path.

Spot silver slipped 2.8% to $33.07 an ounce, platinum fell 1.5% to $968.37, and palladium lost 1.4% to $956.50.