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Saudi Railway Forum Unveils First Package of Investment Opportunities

The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)
The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)
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Saudi Railway Forum Unveils First Package of Investment Opportunities

The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)
The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)

Saudi Arabia launched on Thursday the first batch of investment packages in the railway sector, with a value of one billion riyals ($266 million).

Minister of Transport and Logistics Saleh Bin Nasser Al-Jasser inaugurated the Railway Industrial Opportunities Forum, an event held under the auspices of the National Industrial Development and Logistics Program.

In a speech on the occasion, the minister said that the forum will see the launch of the first package of economic and industrial opportunities, with investments exceeding one billion riyals (266.6 million dollars), which will provide a qualitative advantage and an added value to the transport sector and to other vital economic segments in the Kingdom.

He said the forum aims to consolidate partnerships between the public and private sectors and develop the railway infrastructure, in line with the railway sector’s plans, which seek to open the market to new operators, and increase the participation of the private sector in freight operations, passenger trips and assets.

The event comes a year after the restructuring of the railway sector in the Kingdom under the Saudi Railway Company (SAR), the minister noted.

He unveiled plans to increase its railways by over 8,000 kilometers, to build local and regional connection, double transport capacity, and adopt modern technology to reduce the environmental impact of transport.

For his part, the CEO of SAR, Dr. Bashar Al-Malik, explained that the industrial opportunities offered in the forum came to meet the local need, stressing the company’s determination to overcome all challenges in partnership with all government sectors and take the necessary decisions towards the localization of the railway industry.

Al-Malik urged the private sector to invest these opportunities as basic partners in a vital and promising sector, stressing that the localization of the railway industry was no longer an option but rather “a strategic goal that we strive to achieve with determination.”

In this regard, he emphasized that the SAR was striving to encourage international manufacturers to build partnerships with a number of local factories for the purpose of knowledge sharing and technology transfer. This has contributed to increasing the proportion of local content by more than 41 percent of the SAR’s total revenues, with a value exceeding 1.5 billion riyals.

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US Fed Set to Hold Rates Steady in the Face of Trump Pressure

An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)
An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)
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US Fed Set to Hold Rates Steady in the Face of Trump Pressure

An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)
An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)

The US central bank is expected to keep interest rates unchanged for a fourth straight policy meeting this week, despite President Donald Trump's push for rate cuts, as officials contend with uncertainty sparked by the Republican's tariffs.

While the independent Federal Reserve has started lowering rates from recent highs, officials have held the level steady this year as Trump's tariffs began rippling through the world's biggest economy.

The Fed has kept interest rates between 4.25 percent and 4.50 percent since December, while it monitors the health of the jobs market and inflation.

"The hope is to stay below the radar screen at this meeting," KPMG chief economist Diane Swonk told AFP. "Uncertainty is still very high."

"Until they know sufficiently, and convincingly that inflation is not going to pick up" either in response to tariffs or related threats, "they just can't move," she said.

Since returning to the presidency, Trump has slapped a 10 percent tariff on most US trading partners. Higher rates on dozens of economies are due to take effect in July, unless an existing pause is extended.

Trump has also engaged in a tit-for-tat tariff war with China and imposed levies on imports of steel, aluminum and automobiles, rattling financial markets and tanking consumer sentiment.

But economists expect it will take three to four months for tariff effects to show up in consumer prices.

Although hiring has cooled slightly and there was some shrinking of the labor force according to government data, the unemployment rate has stayed unchanged.

Inflation has been muted too, even as analysts noted signs of smaller business margins -- meaning companies are bearing the brunt of tariffs for now.

At the end of the Fed's two-day meeting Wednesday, analysts will be parsing through its economic projections for changes to growth and unemployment expectations and for signs of the number of rate cuts to come.

The Fed faces growing pressure from Trump, citing benign inflation data, to lower rates more quickly, a move the president argues will help the country "pay much less interest on debt coming due."

On Wednesday, Trump urged Fed Chair Jerome Powell to slash interest rates by a full percentage point, and on Thursday, he called Powell a "numbskull" for not doing so.

He said Powell could raise rates again if inflation picked up then.

But Powell has defended US central bank independence over interest rates when engaging with Trump.

- 'Cautious patience' -

For their part, Fed policymakers have signaled "little urgency" to adjust rates, said EY chief economist Gregory Daco.

He believes they are unwilling to get ahead of the net effects from Trump's trade, tax, immigration and regulation policy changes.

Powell "will likely strike a tone of cautious patience, reiterating that policy remains data dependent," Daco said.

While economists have warned that Trump's tariffs would fuel inflation and weigh on economic growth, supporters of Trump's policies argue the president's plans for tax cuts next year will boost the economy.

On the Fed's path ahead, HSBC Global Research said: "Weak labor market data could lead to larger cuts, while elevated inflation would tend to imply the opposite."

For now, analysts expect the central bank to slash rates two more times this year, beginning in September.

The Fed is likely to be eyeing data over the summer for inflationary pressures from tariffs, said Ryan Sweet, chief US economist at Oxford Economics.

"They want to make sure that they're reading the tea leaves correctly," he said.

Swonk warned the US economy is in a different place than during the Covid-19 pandemic, which could change how consumers react to price increases.

During the pandemic, government stimulus payments helped households cushion the blow from higher costs, allowing them to keep spending.

It is unclear if consumers, a key driver of the economy, will keep their dollars flowing this time, meaning demand could collapse and complicate the Fed's calculus.

"If this had been a world without tariffs, the Fed would be cutting right now. There's no question," Swonk said.