Annual Inflation in Euro Zone Rose to 2.6% in May

A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)
A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)
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Annual Inflation in Euro Zone Rose to 2.6% in May

A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)
A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)

Annual inflation in the euro zone accelerated in May, as initially expected, driven largely by the cost of services, while economists said the European Central Bank (ECB) will cut its deposit rate twice more this year, in September and December.

Eurozone inflation reached 2.6% in May 2024, up from 2.4% in April. A year ago, the rate was 6.1%, according to Eurostat, the European statistical office.

The rate was in line with the estimate published on May 31, and away from the European Central Bank’s target of 2%.

European Union annual inflation was 2.7% in May 2024, up from 2.6% in April. A year earlier, the rate was 7.1%.

Early this month, the ECB has cut interest rates for the first time in almost five years, saying its inflation forecasts had improved.

Luis de Guindos, Vice-President of the ECB, said on Tuesday that the best time to make rate decisions was coinciding with the release of the bank's updated macroeconomic projections, the next of which is slated for September.

“Those are the most significant and interesting moments from the point of view of monetary policy, because our projections are a very important indicator when it comes to decide the evolution of interest rates,” he told Spanish state broadcaster TVE.

According to a significant majority of economists polled by Reuters, the ECB will cut its deposit rate twice more this year, in September and December. They said the risks were skewed towards fewer rate cuts than expected.

That outlook was broadly unchanged from a survey conducted before the ECB delivered its widely telegraphed 25 basis point rate cut on June 6.

Improving business activity, strong wage data and still-sticky price pressures have increased uncertainties around the rationale for more cuts.

In an interview with Reuters on Monday, ECB Chief Economist Philip Lane said there was no “acute urgency” to lower interest rates if the economy continues to expand.

Still, a strong near-80% majority in the June 12-18 Reuters poll, 64 of 81, expected the ECB to cut twice more this year, in September and December, taking the deposit rate to 3.25%.

That was up from nearly two-thirds in May and just about half in an April survey. While 11 expected just one more reduction this year, six predicted three additional cuts.

Financial markets, which until recently were priced for one more cut this year, have started pricing in two reductions just in the past few days, in part related to turmoil in French bond markets following President Emmanuel Macron's decision to call snap parliamentary elections starting later this month.



GACA Reports Significant Growth in Air Travel in Saudi Arabia

GACA Reports Significant Growth in Air Travel in Saudi Arabia
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GACA Reports Significant Growth in Air Travel in Saudi Arabia

GACA Reports Significant Growth in Air Travel in Saudi Arabia

Saudi Arabia's General Authority of Civil Aviation (GACA) released air-traffic statistics showing significant growth in the number of passengers and flights in the Kingdom during the first half of 2024 compared to the same period in 2023.

According to the figures, there was a 17% increase in the number of passengers over the past six months, reaching around 62 million, compared to 53 million during the same period last year.

The number of flights also reached approximately 446,000, marking a 12% increase compared to 399,000 flights during the same period last year.

The airfreight volume in the first six months of 2024 witnessed a 41% increase, reaching 606,000 tons compared to 430,000 in the same period of 2023.

During the first half of this year, GACA launched several development projects, including the development and expansion of Prince Mohammad bin Abdulaziz International Airport, the inauguration of the development and expansion of Al-Ahsa International Airport, the launch of the new additional international departure terminal at Taif International Airport, and the introduction of the self-driving air taxi experience for the first time during the Hajj season.

Furthermore, the authority granted the first operating permit for building cleaning using drones, which illustrates its commitment to enabling safe and innovative advanced air mobility solutions. It also launched a knowledge-testing center for aviation personnel and the first phase of electronic gates at King Khalid International Airport in Riyadh.

GACA won two gold awards for Best Customer Service and Best Public Service Center in Europe, the Middle East, and Africa (EMEA) region, the Consumer Protection Association award for excellence in protecting passengers' rights, and the certificate in the quality management system for monitoring flight safety and environmental sustainability.

The aviation sector saw several achievements in the past six months, including 16 Saudi airports obtaining the Airports Council International (ACI) Airport Service Quality (ASQ) accreditation for 2024.

Saudi airports continued their progress in ranking among the top 50 airports worldwide, as announced in the evaluation results of the international air transport rating organization Skytrax. Prince Mohammad bin Abdulaziz International Airport in Madinah won the first-place award as the best regional airport in the Middle East during the Skytrax World Airport Awards ceremony held in Frankfurt, Germany.

The King Abdulaziz International Airport in Jeddah achieved the highest ratings on the Airports Council International list for 2023. The King Fahd International Airport in Dammam won three of the Saudi Airports Awards for 2023, including the award for the best airport in the category 5-15 million passengers, the award for the best customs inspection area, and the award for the best services for people with disabilities.

SAUDIA also received recognition, winning awards for being the most advanced airline in the world and having the best economy-class catering for 2024 in the Skytrax global ranking.

According to Skytrax, Flynas was crowned the fourth-best low-cost airline in the world for the second consecutive year and the first in the Middle East for the seventh consecutive year, the most important global benchmark for measuring airline performance.

All these achievements are part of the initiatives and programs launched by GACA, aiming to contribute to the development of the air transport industry locally, regionally, and internationally, in line with the National Strategy for the Civil Aviation Sector.

The strategy aims to make the aviation sector in the Kingdom the first in the Middle East by reaching 330 million passengers, increasing air freight capacity to 4.5 million tons, and raising air connectivity to reach 250 destinations to and from Saudi airports by 2030.