Japan Inspects 2 Nissan Plants Days after Recalling over 1 Million Cars

Nissan. (AFP)
Nissan. (AFP)
TT

Japan Inspects 2 Nissan Plants Days after Recalling over 1 Million Cars

Nissan. (AFP)
Nissan. (AFP)

The Japanese Transport Ministry carried out on Wednesday spot inspections at two Nissan Motor Co. plants, a week after it had inspected four factories as part of a probe into final checks.

This is the latest embarrassment to the second-biggest Japanese automaker, which only days ago had to recall 1.2 million cars sold in Japan due to irregularities.

The initial four inspections found the automaker had conducted unauthorized final vehicle checks for most domestic models which had not yet been sold, prompting Nissan to suspend new vehicle registrations with the government.

By Monday, Japan’s second-biggest automaker had discovered problematic checks of more vehicles, and said it would recall all new passenger cars sold in Japan over the past three years.

Nissan said on Monday that a team, including an independent third party, was investigating the cause of the oversight and promised to prevent a recurrence. The problem does not affect Nissan vehicles sold outside Japan.

The failure is not believed to have affected vehicle safety as they were final-stage checks, according to the Yokohama-based maker of the March subcompact, Leaf electric car and Infiniti luxury models.

Nissan Chief Executive Hiroto Saikawa told reporters the oversight occurred at all six Nissan plants in Japan. He acknowledged not enough had been done to ensure inspection staff were aware of inspection requirements.

He estimated the recalls and re-inspections would cost Nissan about 25 billion yen ($222 million), but stressed final costs were still unclear.

This is the second major instance of misconduct involving a Japanese automaker in under two years, after Mitsubishi Motors Corp said it tampered with fuel economy tests for some domestic-market models. While the recall is unlikely to have a significant impact on profitability, it is a blow to Nissan’s reputation just as it enjoys strong domestic sales, analysts said.

In inspecting Nissan’s factories, the ministry found names of certified technicians used on documents to sign off final vehicle checks conducted by non-certified technicians, two people with knowledge of the matter told Reuters.

It was possible the practice occurred at most or all of the six plants, said the people, who declined to be identified as they were not authorized to speak with media on the matter.

Vehicles sold in Japan must be registered with the government. As part of this process, during final checks, vehicles must undergo an additional procedure performed by plant technicians who can be certified by the automakers.

Nissan confirmed the latest two ministry inspections were at its Tochigi plant and at the Auto Works Kyoto plant owned by an affiliate.

“We are currently conducting an investigation into the nature of this vehicle inspection issue at our plants,” spokesman Nick Maxfield said in an emailed statement. A third-party is also involved in its probe.

Nissan’s recall includes all of the 386,000 new passenger vehicles it sold in Japan in 2016, roughly 10 percent of its global sales. It excludes Nissan-branded mini-vehicles produced by Mitsubishi Motors, which comprise roughly one-third of Nissan’s annual domestic sales.

Nissan shares have fallen more than 2 percent since Friday. They closed down 1.2 percent on Wednesday at 1,089.5 yen.



Biden to Face Oil Challenges with Iran Without Antagonizing China

A gas flare on an oil production platform is seen alongside an Iranian flag in the Gulf July 25, 2005. Reuters
A gas flare on an oil production platform is seen alongside an Iranian flag in the Gulf July 25, 2005. Reuters
TT

Biden to Face Oil Challenges with Iran Without Antagonizing China

A gas flare on an oil production platform is seen alongside an Iranian flag in the Gulf July 25, 2005. Reuters
A gas flare on an oil production platform is seen alongside an Iranian flag in the Gulf July 25, 2005. Reuters

In the wake of Iran's April 13 attack on Israel, experts are divided on whether the US will tighten oil-related sanctions on Tehran, with some expecting swift action to expand sanctions and others expecting lax enforcement of existing sanctions.

On Monday, the US House of Representatives overwhelmingly passed legislation aimed at countering China’s purchase of Iranian crude oil as part of a package of bills being brought to the floor in response to Iran’s attack on Israel.

The legislation was approved by a 383-11 vote, surpassing the requisite number needed to overcome a presidential veto. The legislation moves to the Senate where it faces an uncertain fate, according to Bloomberg.

The bill would expand secondary sanctions against Iran to cover all transactions between Chinese financial institutions and sanctioned Iranian banks used to purchase petroleum and petroleum products.

About 80% of Iran’s roughly 1.5 million barrels a day of oil exports are sent to independent refineries in China known as “teapots,” according to a summary of the Iran-China Energy Sanctions Act of 2023.

The bill, introduced by New York Republican Representative Mike Lawler, clarifies that any transaction by a Chinese financial institution for the purchase of oil from Iran qualifies as a “significant financial transaction” for sanctions purposes.

In a statement, Lawler said, “For years, Iran have funded Hamas, Hezbollah, the Houthis, and other terrorist organizations. They backed Hamas' barbaric October 7 attack against Israel.”

He added that all of this is made possible by the money Iran receives from its illicit oil trade - which has amounted to over $88 billion since Biden took office.

“The Iran-China Energy Sanctions Act, along with the SHIP Act we passed last November and which is finally coming up in the Senate Foreign Relations Committee tomorrow (Tuesday), will kneecap Iran's ability to export murder and instability across the region,” Lawler said.

“Enough is enough. We must hold Iran and its backers accountable - especially China, the number one purchaser of Iranian petroleum. These two bills will do exactly that and I urge the Senate to pass them both as soon as possible.”

David Goldwyn, chairman of the S&P Atlantic Council Global Energy Center's Energy Advisory Group, said on Tuesday, “I expect the [US Department of Treasury] to quickly ramp up and expand sanctions on Iran's oil trade both as a direct response to Iran's drone and missile attack on Israel, and as a means to forestall a more escalatory response by Israel.”

The US may crack down on participation of US and European insurance clubs in the Iran-China oil trade, Goldwyn said. “China has been a free rider on US diplomatic efforts to contain tensions in the Middle East and has benefited from flouting US sanctions on Iran, Russia and Venezuela,” he said.

Additional Sanctions

Earlier in the day, US Treasury Secretary Janet L. Yellen said additional sanctions on Iran would be forthcoming in retaliation for its attack against Israel over the weekend.

Market Impact

But like the Russia price cap policy, new measures against Iran will likely reduce Iran's income more than it will reduce oil flows, Goldwyn said. “The impact on prices should therefore be marginal,” he said.

Rachel Ziemba, senior advisor at political risk consultancy Horizon Engage, said there could be some additional sanctions enforcement with a focus on targets linked to the Revolutionary Guard Corps and regional proxies. “But I don't think it will be material to the oil markets,” she added.

In an April 15 note, Rapidan Energy Group said that lawmakers may be using the votes to pressure the Biden administration to enforce oil sanctions more aggressively. “However, these bills largely restate existing authorities and, as such, are mostly political messaging to signal support for Israel,” Rapidan said.

To avoid US sanctions, China already channels all Iran transactions through banks that are not exposed to the US financial system, it said.

Brenda Shaffer, an energy expert at the US Naval Postgraduate School, said the US will likely maintain its soft enforcement of Iran oil sanctions, in part to avoid an oil price spike.

“Regardless of potential new declarations, the Biden administration will not enforce sanctions in a serious manner in an election year, when there are formally sanctions on Iran, Russia and Venezuela, and the Strategic Petroleum Reserve is low,” Shaffer said.

Washington has even asked Ukraine not to attack Russian energy supplies, despite its effectiveness in battle, due to fears of a rise in the global oil price, Shaffer said. “The administration has not even taken serious steps to neutralize Iran's proxy—the Houthis—disruption of global shipping,” she said.

Speaking to Fox News on Sunday, Representative Steve Scalise the No. 2 House Republican, said the administration had made it easier for Iran to sell its oil, generating revenues that were being used to “go fund terrorist activity.”

Several regional analysts said they doubted Biden would take significant action to ramp up enforcement of existing US sanctions to choke off Iran's crude exports, the lifeblood of its economy.

“Even if these bills pass, it's hard to see the Biden administration going into overdrive, to try to spring into action or enforce existing sanctions or new ones to try to cut or curb (Iranian oil exports) in any meaningful way,” said Scott Modell, a former CIA officer, now CEO of Rapidan Energy Group.

The China Factor

Aggressively enforcing sanctions could also destabilize the US-China relationship, which Chinese and US officials have tried to repair following a rocky period after the US last year downed a suspected Chinese surveillance balloon that crossed US territory.

Tanker tracking specialist Vortexa Analytics estimated China acquired a record 55.6 million metric tons or 1.11 million barrels of Iranian crude a day last year. That amounted to roughly 90% of Iran's crude oil exports and 10% of China's oil imports.

Several analysts suggested Washington might take some action to cut Iran's oil exports in part to temper any Israeli reaction to the Iranian strikes, which could escalate the conflict.

But they said this would fall short of dramatic action such as sanctioning a major Chinese financial institution and instead could involve targeting Chinese or other entities engaged in such trade.

“If you really want to go after Iran's oil exports yes, you would have to take meaningful action against China,” said one source familiar with the issue.

“Are you really going to go after the big banks? Are you going to do something that the administration has not done and even the Trump administration did not do?” he added.

Jon Alterman, a Middle East analyst at the Center for Strategic and International Studies, said there were limits to what Washington can do to impose sanctions and that evaders are adept at finding loopholes.

“I'd expect to see a gesture in the direction of (imposing) economic consequences on Iran, but I don't expect the White House — or any future White House — to be able to completely turn off the spigot of Iranian oil,” he said.

Iranian Oil Exports

Iran, the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), produces about 3 million barrels of oil per day (bpd), or around 3% of total world output, according to Reuters.

The US has sought to limit Iran's oil exports since President Donald Trump exited a 2015 nuclear accord between Western powers and Iran in 2018 and re-imposed sanctions aimed at curbing Iran's revenue.

During Trump's term, Iran's oil exports slowed to a trickle.

They have risen during Biden's tenure as analysts say sanctions have been less rigorously enforced, Iran has succeeded in evading them, and as China has become a major buyer, according to industry trackers.

Although a member of OPEC and OPEC+ - which brings together OPEC and allies, including Russia - Iran, because of the sanctions imposed on it, is exempt from the group’s output restrictions that are designed to support the oil market.

Rising Output

Driven by strong Chinese demand last year and continuing into 2024, Iran's crude exports in March averaged 1.61 million bpd according to industry analysts Kpler, the highest since May 2023 when they were 1.68 million bpd, the highest since 2018.

The peaks of 2018 reflected the easing of sanctions that followed the 2015 nuclear deal with Iran.

Iranian crude and condensate exports reached 2.8 million bpd in May 2018, the highest since at least 2013 according to industry analysts Kpler.

In May 2018, the crude oil portion of Iran's exports was 2.51 million bpd, Kpler found. According to OPEC data, that was the most since 2011 when Iran exported 2.54 million bpd on average.

Iran's oil production reached all-time highs in the 1970s with a peak of 6.02 million bpd in 1974, according to OPEC data. That amounted to over 10% of world output at the time.

Trump and Biden

Also in May 2018, the United States under Trump's presidency unilaterally withdrew from the 2015 deal and re-imposed sanctions, aiming to cut Iran's oil sales to zero.

Iran stopped providing data on its oil exports, but assessments based on tanker tracking show they fell sharply in the next two years to below 200,000 bpd in some months of 2020, the lowest since at least 1980 according to OPEC data.

In late 2020, Biden won the US presidential election.

In January-March 2021, China increased its imports of Iranian oil to almost 800,000 bpd in January and almost 1 million bpd in March, although imports dropped again in April of that year.

In 2021, Iran and the US began indirect talks meant to bring both countries back into full compliance with the 2015 nuclear deal. Iranian exports rose during 2022, ending the year above 1 million bpd.

Analysts have said the higher exports appear to be partly a result of Iran's success in evading US sanctions.

Iran has for years evaded sanctions through ship-to-ship transfers and “spoofing” - or manipulating GPS transponders so that ships show up in different positions - and the country is getting better at such tactics, analysts have said.

Analysts have also said the rise in exports appears to be the result of US discretion in enforcing the sanctions.


IMF Raises Growth Forecast for Saudi Economy to 6% in 2025

The International Monetary Fund (IMF) HQ2 Atrium on day 2 of the 2024 Spring Meetings of the IMF and the World Bank Group (WBG) in Washington, DC, USA, 16 April 2024. EPA/SHAWN THEW
The International Monetary Fund (IMF) HQ2 Atrium on day 2 of the 2024 Spring Meetings of the IMF and the World Bank Group (WBG) in Washington, DC, USA, 16 April 2024. EPA/SHAWN THEW
TT

IMF Raises Growth Forecast for Saudi Economy to 6% in 2025

The International Monetary Fund (IMF) HQ2 Atrium on day 2 of the 2024 Spring Meetings of the IMF and the World Bank Group (WBG) in Washington, DC, USA, 16 April 2024. EPA/SHAWN THEW
The International Monetary Fund (IMF) HQ2 Atrium on day 2 of the 2024 Spring Meetings of the IMF and the World Bank Group (WBG) in Washington, DC, USA, 16 April 2024. EPA/SHAWN THEW

The International Monetary Fund has raised its expectations for Saudi Arabia’s economic growth in 2025 to 6 percent – up from 5.5 percent predicted in January.

The IMF also said the Kingdom’s output will grow by 2.6 percent in 2024, down 0.1 percent compared to the previous projection.

Earlier in April, the World Bank also raised the growth prospects of the Kingdom’s economy to 5.9 percent in 2025, up from an earlier projection of 4.2 percent.

The World Bank said Saudi Arabia’s non-oil private sector is expected to grow by 4.8% during the current year due to expansionary public finance policies.


Yellen Says Iran’s Actions Could Cause Global ‘Economic Spillovers’, Warns of More Sanctions

 US Treasury Secretary Janet Yellen speaks during a press conference amid the IMF-World Bank Group spring meetings, at the Treasury Department in Washington, DC on April 16, 2024. (AFP)
US Treasury Secretary Janet Yellen speaks during a press conference amid the IMF-World Bank Group spring meetings, at the Treasury Department in Washington, DC on April 16, 2024. (AFP)
TT

Yellen Says Iran’s Actions Could Cause Global ‘Economic Spillovers’, Warns of More Sanctions

 US Treasury Secretary Janet Yellen speaks during a press conference amid the IMF-World Bank Group spring meetings, at the Treasury Department in Washington, DC on April 16, 2024. (AFP)
US Treasury Secretary Janet Yellen speaks during a press conference amid the IMF-World Bank Group spring meetings, at the Treasury Department in Washington, DC on April 16, 2024. (AFP)

US Treasury Secretary Janet Yellen warned Tuesday of potential global economic damage from rising tensions in the Middle East and pledged that the US and its allies won't hesitate to use their sanctions powers to address Iran's "malign and destabilizing activity" in the region.

She made her remarks ahead of this week's spring meetings of the International Monetary Fund and World Bank, saying Iran's weekend missile attack on Israel "underscores the importance of Treasury’s work to use our economic tools to counter Iran’s malign activity."

She added: "From this weekend’s attack to the Houthi attacks in the Red Sea, Iran’s actions threaten the region’s stability and could cause economic spillovers."

Iran's missile attack on Israel early Sunday came in response to what it says was an Israeli strike on Iran's consulate in Syria earlier this month. Israel’s military chief said Monday that his country will respond to the attack, while world leaders caution against retaliation, trying to avoid a spiral of violence.

As the IMF and its fellow lending agency, the World Bank, hold their spring meetings this week, high on the agenda are the fast-rising tensions between Iran and Israel and what escalation could spell for the global economy.

Israel and Iran have been on a collision course throughout Israel’s six-month war against Hamas in Gaza. The war erupted after two armed groups backed by Iran led an attack on Oct. 7 that killed 1,200 people in Israel and kidnapped 250 others. An Israeli offensive in Gaza has caused widespread devastation and killed over 33,000 people, according to local health officials.

"We’ve targeted over 500 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies since the start of the Administration," Yellen said, citing sanctions against Iran’s drone and missile programs, Hamas, the Houthi militias, Hezbollah, and other Iraqi militia groups.

"Treasury will not hesitate to work with our allies to use our sanctions authority to continue disrupting the Iranian regime’s malign and destabilizing activity," she said. "I fully expect we will take additional sanctions actions against Iran in the coming days."

The annual gathering will take place as other ongoing conflicts, including Russia's invasion of Ukraine, threaten global financial stability.

Yellen in February offered her strongest public support yet for the idea of liquidating roughly $300 billion in frozen Russian Central Bank assets and using them for Ukraine’s long-term reconstruction.

She said Tuesday that the US is "continuing to work with our international partners to unlock the economic value of immobilized Russian sovereign assets and ensure that Russia pays for the damage it has caused."

Yellen added that she will meet with Group of Seven finance leaders Wednesday to continue discussions on the topic and will look at "a series of possibilities, ranging from actually seizing the assets to using them as collateral."

Another major issue for this year's meetings on the US side, Yellen said, will be ongoing conversations about Chinese industrial policy that poses a threat to US jobs and the global economy. She traveled to Guangzhou and Beijing earlier this month, to hold "difficult conversations" with counterparts over what she describes as China's overcapacity in its wave of low-priced Chinese green tech exports that could overwhelm factories in the US and make it impossible to compete.

Yellen said she plans to meet later this week with her Chinese counterparts for a fourth meeting of the US-China Economic and Financial Working Groups, "to share information, identify potential areas of cooperation, and, when we disagree, frankly communicate concerns."

US Treasury and China’s Ministry of Finance launched the economic working groups in an effort to ease tensions and deepen ties between the nations.


Saudi Arabia, Pakistan Seek to Boost Trade, Support Investors

Saudi Minister of Foreign Affairs Prince Faisal bin Farhan bin Abdullah and his Pakistani counterpart Ishaq Dar chair the Saudi-Pakistani Special Investment Facilitation Council (SIFC)  in Islamabad on Tuesday. (SPA)
Saudi Minister of Foreign Affairs Prince Faisal bin Farhan bin Abdullah and his Pakistani counterpart Ishaq Dar chair the Saudi-Pakistani Special Investment Facilitation Council (SIFC) in Islamabad on Tuesday. (SPA)
TT

Saudi Arabia, Pakistan Seek to Boost Trade, Support Investors

Saudi Minister of Foreign Affairs Prince Faisal bin Farhan bin Abdullah and his Pakistani counterpart Ishaq Dar chair the Saudi-Pakistani Special Investment Facilitation Council (SIFC)  in Islamabad on Tuesday. (SPA)
Saudi Minister of Foreign Affairs Prince Faisal bin Farhan bin Abdullah and his Pakistani counterpart Ishaq Dar chair the Saudi-Pakistani Special Investment Facilitation Council (SIFC) in Islamabad on Tuesday. (SPA)

Saudi Arabia and Pakistan are seeking to bolster economic cooperation, boost the trade exchange between them and support investors to expand their work in the two countries.  

Saudi Minister of Foreign Affairs Prince Faisal bin Farhan bin Abdullah and his Pakistani counterpart Ishaq Dar chaired in Islamabad on Tuesday a meeting of the Saudi-Pakistani Special Investment Facilitation Council (SIFC).  

A high-level Saudi delegation attended the meeting. It included Minister of Environment, Water, and Agriculture Abdulrahman Al-Fadley, Minister of Industry and Mineral Resources Bandar Al-Khorayef, Advisor to the Royal Court Mohammad Al-Tuwaijri, Assistant Minister of Investment Ibrahim Al-Mubarak, as well as a number of senior officials from the ministries of foreign affairs and energy, Public Investment Fund, and the Saudi Fund for Development.  

Prince Faisal praised the deep-rooted Saudi-Pakistani relations, stressing that the Saudi delegation’s visit complements the meeting held by Prince Mohammed bin Salman bin Abdulaziz Al-Saud, Crown Prince and Prime Minister of the Kingdom of Saudi Arabia, and Prime Minister of Pakistan Muhammad Shehbaz Sharif in Makkah.  

For his part, Dar praised the deep bonds and strategic interests that bind Pakistan and Saudi Arabia. He highlighted the importance of bolstering the strategic and economic partnership and the vital role played by Saudi investments in boosting this bond. 

He highlighted the SIFC platform through which Islamabad is seeking to simplify investment operations and create a prosperous investment environment in Pakistan. 

He underlined the abundant opportunities for investment in Pakistan in the fields of agriculture, Information Technology, and mining, calling on Saudi investors to forge partnerships that are beneficial to both parties. 

Officials from the SIFC delivered comprehensive presentations about the investment opportunities in the main sectors of the Pakistani economy.  

For their part, Saudi officials stressed the importance of improving the investment environment in Pakistan, praising the role of the SIFC in amicably settling investment issues. 

The two parties set a bilateral executive mechanism to coordinate affairs related to investments so that pledges can be transformed into tangible results. 

Chairman of the Saudi-Pakistani Business Council Fahd al-Bash stressed to Asharq Al-Awsat the importance of the SIFC meeting, saying it was preparing a number of major investments in the Pakistani economy. 

This reflects Saudi Arabia’s commitment to supporting the people of Pakistan and bolstering economic and trade relations between the countries, he remarked.  

“We believe in the cooperation and partnership between the two countries and we aspire to boost these ties in various sectors through promising strategic investments and partnerships,” he added.  

“We are optimistic about the future of the economic and trade relations and look forward to a new chapter in fruitful and sustainable cooperation,” he went on to say. 

Prince Faisal is on an official visit to Pakistan where he met with President Asif Ali Zardari and Prime Minister Muhammad Shehbaz Sharif. 


Saudi Real Estate Experts Forecast Surge in Residential Property Demand

Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)
Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)
TT

Saudi Real Estate Experts Forecast Surge in Residential Property Demand

Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)
Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)

Saudi Arabia’s property prices rose by 0.6% in the first quarter of this year, mainly due to a 1.2% increase in residential property prices. Government programs are helping keep the market stable, and experts predict higher demand for homes soon.

The “Sakani” program, run by the Ministry of Municipal and Rural Affairs and Housing, assisted 32,000 Saudi families in the first quarter, a 15% increase from last year.

Residential property prices went up by 1.2% annually, driven by a similar increase in land prices. Apartments saw an 0.8% increase, but residential buildings, villas, and houses experienced slight decreases.

Commercial property prices dropped by 0.5%, influenced by lower land and exhibition prices. However, prices for commercial buildings remained steady.

Experts note that residential property prices are resilient, thanks to government initiatives. They expect interest rate cuts this year, which could boost the real estate market.

Ahmed Al-Faqih, a real estate engineer and analyst, emphasized that reports from government entities and research companies have consistently shown that the increase in interest rates over the past two years has coincided with rising property prices and transaction values.

“This is driven by several government incentives, including the momentum of major real estate projects injected into Riyadh, which accounts for more than 35% of the real estate market transactions, as well as in Jeddah," Al-Faqih told Asharq Al-Awsat.

He noted that real estate transaction indicators have been on the rise since the fourth quarter of last year, indicating expectations of interest rate cuts multiple times during the current year, which would mean further activity in the real estate market.

According to Al-Faqih, the residential sector has not been significantly affected price-wise and has remained generally resilient, attributed to the supply and demand equation leaning towards increased demand and limited supply.

He mentioned that demand is driven by population growth, migration to major cities, and the possibility of property ownership for holders of distinguished residency.

The Housing Ministry aims to increase home ownership to 70% by 2030 by offering subsidized land and support programs. The market also relies on commercial, industrial, and investment properties.

Regulations like the “Real Estate Contributions” program aim to enhance transparency and protect stakeholders' rights. These efforts are expected to stimulate investments and drive growth in the real estate market.


Saudi Inflation Slows to Lowest Level Since 2021

A Saudi citizen buys sweets from one of the major stores in preparation for Eid al-Fitr (SPA)
A Saudi citizen buys sweets from one of the major stores in preparation for Eid al-Fitr (SPA)
TT

Saudi Inflation Slows to Lowest Level Since 2021

A Saudi citizen buys sweets from one of the major stores in preparation for Eid al-Fitr (SPA)
A Saudi citizen buys sweets from one of the major stores in preparation for Eid al-Fitr (SPA)

In March, inflation in Saudi Arabia slowed down to its lowest level since 2021, hitting 1.6% annually compared to 1.8% in February.

This drop was mainly due to a slowdown in food and beverage price increases. However, housing rents continued to climb, reaching 10.5%.

In June 2021, inflation peaked at 6.16%, according to data from Saudi Arabia’s General Authority for Statistics (GASTAT).

Among the G20 nations, Saudi Arabia ranks third lowest in inflation rates, trailing behind Switzerland and Italy.

According to the World Bank’s latest report for the Middle East and North Africa, Saudi Arabia and Kuwait have managed to keep inflation in check through strict monetary policies and support for food and energy prices.

Recent data from GASTAT shows that housing and utility prices went up by 8.8%, while food and drink prices rose by 0.9%. However, transportation costs fell by 1.8%, and prices for miscellaneous goods and personal services increased by 1.1%.

Experts speaking to Asharq Al-Awsat say the Saudi government's measures have kept inflation lower compared to global economies.

Mohammed Bin Duleim Al-Qahtani, an economist at King Faisal University, pointed out that housing, rent, dining out, and electricity prices still affect inflation.

He believes the economy will grow, preventing major economic downturns over the next couple of years. Al-Qahtani also expected inflation to drop significantly by 2028.

Nasser Al-Quraowi, head of the Saudi Center for Studies and Research, said Saudi Arabia ranks among the top five countries in stable inflation despite global crises.

He emphasized the state’s role in protecting citizens and residents’ living standards, which will remain a priority for inflation control in the future.


NEOM Hosts Global Contractor Forum to Shape Future Projects

With the help of the companies that participated in the forum, the workforce is anticipated to grow to over 200,000 by next year - SPA
With the help of the companies that participated in the forum, the workforce is anticipated to grow to over 200,000 by next year - SPA
TT

NEOM Hosts Global Contractor Forum to Shape Future Projects

With the help of the companies that participated in the forum, the workforce is anticipated to grow to over 200,000 by next year - SPA
With the help of the companies that participated in the forum, the workforce is anticipated to grow to over 200,000 by next year - SPA

NEOM, the sustainable development taking shape in the northwest of Saudi Arabia, brought together over 100 of the world’s leading construction companies for a two-day industry forum, SPA reported.

The gathering, held in NEOM, showcased on-the-ground construction progress while highlighting future developments as NEOM advances into the next stage of its vast portfolio of projects.
As NEOM’s projects transition into a new phase of execution, the demand for top-tier construction proficiency is vital to deliver some of the most ambitious development projects the world has ever seen. These bold projects include the 170 km long city, THE LINE, currently being built in modular phases, with the first phase welcoming residents in 2030. The forum also emphasized the importance of innovation within the industry and how traditional construction methods will not meet the scale and scope of NEOM. Additionally, on-the-ground progress was showcased throughout NEOM, including construction progress on THE LINE, the Spine, Oxagon, Trojena, and the NEOM International Airport.
The forum opened with an address by the CEO of NEOM, Nadhmi Al-Nasr, stating: "As we go into our busiest ever phase of development, the scale of opportunities across NEOM is monumental. With projects progressing fast across all parts of the region, we are committed to collaborating with globally renowned contractors to achieve the vision of NEOM".
Attendees benefited from insights into the plans and scope of upcoming opportunities. Additionally, they visited project sites to witness first-hand the construction currently taking place, which is already on a massive scale seldom seen anywhere in the world. The event also included one-on-one meetings during which specific business opportunities were discussed as contractors displayed their services and capabilities.
The forum hosted a mix of firms from Saudi Arabia, along with international firms from Asia, Europe, North America, and North Africa. Construction is currently underway throughout all of NEOM, with a construction workforce of over 140,000. With the help of the companies that participated in the forum, the workforce is anticipated to grow to over 200,000 by next year.


World Bank Expects MENA GDP to Rise to 2.7% in 2024 Amid Heightened Uncertainty

MENA’s gross domestic product (GDP) is forecast to rise to 2.7% in 2024, which is a tepid increase from 1.9% in 2023.  (Reuters)
MENA’s gross domestic product (GDP) is forecast to rise to 2.7% in 2024, which is a tepid increase from 1.9% in 2023. (Reuters)
TT

World Bank Expects MENA GDP to Rise to 2.7% in 2024 Amid Heightened Uncertainty

MENA’s gross domestic product (GDP) is forecast to rise to 2.7% in 2024, which is a tepid increase from 1.9% in 2023.  (Reuters)
MENA’s gross domestic product (GDP) is forecast to rise to 2.7% in 2024, which is a tepid increase from 1.9% in 2023. (Reuters)

The World Bank’s new Middle East and North Africa Economic Update, entitled “Conflict and Debt in the Middle East and North Africa”, shows that lackluster growth, rising indebtedness and heightened uncertainty due to the conflict in the Middle East are impacting economies across the region.

According to the report, MENA economies are expected to return to low growth akin to the decade prior to the pandemic. MENA’s gross domestic product (GDP) is forecast to rise to 2.7% in 2024, which is a tepid increase from 1.9% in 2023.

As in 2023, oil importing and oil exporting countries are likely to grow at less disparate rates than 2022, when higher oil prices boosted growth in oil exporters.

For Gulf Cooperation Council (GCC) countries, the 2024 growth uptick reflects expectations of robust non-oil sector activity and fading out of oil production cuts towards the end of the year. GDP growth in almost all oil importing countries is expected to decelerate.

The report looks at the economic impact of the conflict in the Middle East on the region. Economic activity in Gaza has come to a near standstill. The GDP of the Gaza strip dropped by 86% in the last quarter of 2023. The West Bank has plunged into a recession, with simultaneous public and private sector crises. Recent World Bank reports go into further depth on damages to the Gaza Strip and catastrophic impacts on the people of Gaza.

The economic impact of the conflict on the rest of the region has remained relatively contained, but uncertainty has increased. For example, the shipping industry has coped with shocks to maritime transport by rerouting vessels away from the Red Sea, but any prolonged disruptions to routes through the Suez Canal could increase commodity prices regionally and globally.

The report also looks at rising indebtedness in the MENA region. Between 2013 and 2019, the median debt-to-GDP ratio for MENA economies increased by more than 23 percentage points. The pandemic made things worse as declines in revenue, together with pandemic support spending, increased financing needs for many countries.

This rising indebtedness is heavily concentrated in oil-importing economies, which now have a debt-to-GDP ratio 50 percent higher than the global average of emerging markets and developing economies. Approaching 90 percent of GDP in 2023, oil-importing countries in MENA have a debt-to-GDP ratio almost three times higher than that of oil exporting countries in the region.

The report presents evidence that oil-importing countries in MENA have been unable to grow out of debt or inflate their debt away, making fiscal discipline essential to curb indebtedness. Critically, off-budget items which have played a large role in some MENA economies have been to the detriment of debt and fiscal transparency. The challenge for oil exporters is one of economic and fiscal-revenue diversification, given the structural change in global oil markets and the rising demand for renewable sources of energy. Overall, MENA economies need to undertake structural reforms, chief among them transparency, to unlock growth and forge a sustainable path ahead.


Gold Rises After Iran Attacks Israel

Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh November 4, 2009. REUTERS/Ajay Verma/File Photo
Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh November 4, 2009. REUTERS/Ajay Verma/File Photo
TT

Gold Rises After Iran Attacks Israel

Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh November 4, 2009. REUTERS/Ajay Verma/File Photo
Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh November 4, 2009. REUTERS/Ajay Verma/File Photo

Gold prices rose on Monday, attracting some safe haven bids, while oil prices were choppy after Iran's retaliatory attack on Israel over the weekend stoked fears of a wider regional conflict and kept traders on edge for what comes next.

US stock futures ticked higher after major indexes ended sharply lower on Friday as results from major US banks failed to impress.

Iran had, late on Saturday, launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, marking its first direct attack on Israeli territory.

The threat of open warfare erupting between the arch Middle East foes and dragging in the United States has left the region on tenterhooks, as US President Joe Biden warned Prime Minister Benjamin Netanyahu the US will not take part in a counter-offensive against Iran.

Israel said "the campaign is not over yet".

Global markets struggled for direction early in Asia on Monday after the weekend developments in the Middle East, as oil prices edged broadly lower in volatile trade, gold jumped and the dollar held broadly steady.

Gold rose 0.7% to $2,359.92 an ounce, after having scaled a record of $2,431.29 on Friday. The yellow metal has climbed some 14% for the year thus far.

"Everything seems pretty well contained," said Chris Weston, head of research at Pepperstone. "From a very simplistic perspective, the actions from Iran haven't really surprised anyone, they're very much in line with what we were pricing late last week.

"What may be causing a slight move up in the gold price... is the idea that we could see another counter response from Israel, and if that was to happen... that could cause risk (assets) to move down."


Indian Shares Fall as Middle East Tensions Spook Investors

The new logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India, July 12, 2023. REUTERS/Francis Mascarenhas/File photo Purchase Licensing Rights
The new logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India, July 12, 2023. REUTERS/Francis Mascarenhas/File photo Purchase Licensing Rights
TT

Indian Shares Fall as Middle East Tensions Spook Investors

The new logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India, July 12, 2023. REUTERS/Francis Mascarenhas/File photo Purchase Licensing Rights
The new logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India, July 12, 2023. REUTERS/Francis Mascarenhas/File photo Purchase Licensing Rights

Indian shares fell on Monday as investors sold riskier assets after Iran's retaliatory attack on Israel over the weekend spurred fears of a wider regional conflict.

The NSE Nifty 50 (.NSEI), opens new tab was down 0.73% at 22,354.70 as of 10:10 a.m. IST, while the S&P BSE Sensex (.BSESN), opens new tab fell 0.75% to 73,687.02.

"Risk sentiment took a hit after Iran's retaliatory attack on Israel over the weekend stoked fears of a wider conflict in the Middle East region and kept traders on edge," analysts at SMC Global Securities said in a note on Monday, Reuters reported.

"The worries in the Middle East have rattled all financial markets, pushing investors to look for safer places for their money."

Forty-one of the Nifty 50 stocks declined. All the 13 major sectors logged losses.

Shares of Indian rice and tea exporters fell amid escalations in Middle East tensions. India is one of the top exporters of basmati rice and tea, and Iran is a leading buyer of those commodities.

Other Asian peers also traded lower, with the MSCI Asia ex-Japan index (.MIAPJ0000PUS), opens new tab shedding 0.72%.

Among individual stocks, Tata Consultancy Services (TCS.NS), opens new tab, India's top software services firm by revenue, gained 0.8% and was among the top five Nifty 50 gainers.

"While the company reported lower-than-expected revenue in March quarter, we still expect TCS to lead peers on revenue growth in fiscal year 2024, aided by ramp-up of mega deals," analysts at Kotak Institutional Equities said.

Aluminium producer Hindalco Industries (HALC.NS), opens new tab gained 2.5% and was the top Nifty 50 gainer, after the US and UK imposed restrictions on the trading of new Russian commodities on the London Metals Exchange and on the Chicago Mercantile Exchange.

This (development) should be most positive for aluminium prices and shares of aluminium producers, Jefferies said.

The broader, more domestically-focussed small- (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab lost about 3% and 2%, respectively, after outperforming the benchmarks in April, ahead of the session.