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Saudi Industrial Production Index Sees Upward Growth

The Saudi industrial production index (IPI) continued its upward growth as it recovers from the coronavirus pandemic. (Asharq Al-Awsat)
The Saudi industrial production index (IPI) continued its upward growth as it recovers from the coronavirus pandemic. (Asharq Al-Awsat)
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Saudi Industrial Production Index Sees Upward Growth

The Saudi industrial production index (IPI) continued its upward growth as it recovers from the coronavirus pandemic. (Asharq Al-Awsat)
The Saudi industrial production index (IPI) continued its upward growth as it recovers from the coronavirus pandemic. (Asharq Al-Awsat)

The Saudi industrial production index (IPI) has continued its upward growth since May 2021, after negative growth rates in 2019 and 2020 that were caused by the coronavirus pandemic.

The Saudi General Authority for Statistics (GASTAT) revealed that IPI increased 16.8 percent compared to August of 2021, as it continued to achieve positive growth trends due to high production in mining, quarrying, manufacturing, electricity, and gas supply.

The relative rates of the mining and quarrying, manufacturing, and electricity and gas supply sectors in the IPI are 74.5 percent, 22.6 percent, and 2.9 percent, respectively.

In August 2022, mining and quarrying increased by 15.5 percent compared to the same month in 2021.

Saudi Arabia increased its oil production to reach the highest level of more than 11 million barrels per day in 2022.

The manufacturing continued to rise as the activity performance increased 22 percent in August, compared to the same month last year, and electricity and gas supplies showed an increase of 11.3 percent.

The Authority said the impact of growth in the electricity and gas supplies index on the IPI was limited due to its small impact in the index.

It stated that the IPI continued to show favorable growth due to the high production. Looking at the long-term, the IPI growth became positive in May 2021 and continued its upward trend during the following months, accelerating at the end of the year.

Meanwhile, the Ministry of Industry and Mineral Resources announced the qualification of eight local companies to compete for an exploration license for gypsum ore in the al-Qasab mining site.

The site, with an area of 600,00 sqm, is located south of the Nabat Center in the al-Madinah region, according to the Ministry.

The Ministry revealed the qualified companies are Saudi National Gypsum, el-Khayyat Gypsum, the United Cement Industrial Co., Global Gypsum Co., United Mining Industries Co., Mada Gypsum Co., and ASK Gypsum Factory.

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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.