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World Bank Expects Recovery of Iraq, Yemen Economy... Growth in Egypt

World Bank Expects Recovery of Iraq, Yemen Economy... Growth in Egypt
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World Bank Expects Recovery of Iraq, Yemen Economy... Growth in Egypt

World Bank Expects Recovery of Iraq, Yemen Economy... Growth in Egypt

The World Bank expected Iraq and Yemen’s economies to witness a remarkable recovery in the coming period.

Following the end of the war and the formation of a new government, Iraq is expected to grow at 2.8 percent in 2019 after a contraction of 1.7 percent in 2017 and a modest recovery of 0.6 percent in 2018, the organization said in its (Middle East and North Africa) MENA Economic Update report.

“Spending on reconstruction could potentially boost the country’s economy in the years ahead,” the report added.

Its economists expect a rapid recovery in Yemen in a potential scenario of contained violence although the risks remain high.

“Saudi Arabia’s Vision 2030, embodied in its recently announced expansionary budget for 2019, aims to boost non-oil activity and enhance economic diversification partly by increasing capital expenditures,” according to the report.

It said growth in GCC economies is expected to reach 2.1 percent in 2019, up by 0.1 percent from 2018.

The WB partly and indirectly attributed the revival of growth to policies that reduced the GCC’s reliance on oil revenues in addition to UAE’s investments in infrastructure in preparation to host Expo 2020.

Iran is expected to contract sharply, the report noted, explaining that its real GDP is expected to have another recessionary year with -3.8 percent growth in 2019 after a 1.6 percent contraction in 2018, as oil output falls in part due to the US sanctions.

“Oil importers, as a group, are expected to grow four percent in 2019, slightly up from a 3.8 percent growth in 2018, when tourists flocked back to the region, especially to Egypt and Tunisia.”

“The uptick in tourism helped to modestly reduce trade imbalances and current account deficits,” the report explained.

The World Bank anticipates that Egypt will be one of the top performers among MENA oil importers, with a growth rate forecast at 5.5 percent for 2019, the strongest since 2008.

“It has been driven by rising natural gas production, revitalized tourism, and higher government investment spending.”

“Because rising revenues from VAT and income taxes have outpaced expenditures and subsidies have been cut several times, the fiscal deficit in Egypt has been narrowing for the past two years,” the report stressed.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.