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World Bank Lowers Growth Forecast for Tunisia

Women shop at Sidi Bahri market in Tunis, Tunisia (File photo: Reuters)
Women shop at Sidi Bahri market in Tunis, Tunisia (File photo: Reuters)
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World Bank Lowers Growth Forecast for Tunisia

Women shop at Sidi Bahri market in Tunis, Tunisia (File photo: Reuters)
Women shop at Sidi Bahri market in Tunis, Tunisia (File photo: Reuters)

The World Bank has just revised its growth forecasts downwards for Tunisia, dropping it from a previous forecast of 3.5 percent to 3 percent in 2022.

The report prepared by the bank, entitled "Forecasting Growth in The Middle East and North Africa in Times of Uncertainty," indicated that Tunisia's economic prospects remain uncertain, especially that the economic resilience in 2021 was moderate, and that concerns related to debt repayment remain strong due to budget deficit and high financing needs.

The bank highlighted that the modest growth is due to the economy's close link to tourism, tight budget margins, challenging business climate, and restrictions on investment and competition.

The report pointed out that Tunisia is a supplier of energy and grain and remains vulnerable to increasing international raw materials prices due to extreme uncertainty, such as the current war in Ukraine.

Tunisia is facing challenges in maintaining its food subsidies.

"Rising oil prices could delay reforms, however, as subsidies might rise with global food and energy prices," according to the report.

The World Bank noted that the growth rate in Tunisia would achieve gains, but it remains modest in light of "the structural volatility," the economic situation, the repercussions and the uncertainty of the war in Ukraine, and the sanctions associated with it.

The bank expected the inflation rate to reach 6.5 percent in 2022 and 2023 and the poverty rate to reach 3.4 percent in 2022 and drop to 3.1 percent in 2023.

Tunisian expert Ezzedine Saidan believes the figures and indicators are optimistic, noting that the local economy is still under solid shock at energy and grain prices, which Tunisia depends on for supply.

Saidan warned that if commodity prices continue to rise, the cost will double on the local economy, and such results may not be achieved again.

The Ministry of Finance predicted a medium growth rate in the coming years, announcing in a February report that the growth rate will reach 2.5 percent in 2023 and 2024, then three percent in 2025 and 2026.

The Ministry indicated its adherence to reducing the budget deficit, adding that wages should be dropped to 14.4 percent of the gross domestic product in 2024 compared to 16.4 percent in 2020.

Subsidy expenditure should decrease from 3.8 percent of GDP in 2020 to 2.1 percent in 2024.

The government aims to gradually reduce its budget deficit by 2026 from 8.9 percent of GDP in 2020 to 6.2 percent in 2022 and 2023, then 5.3 percent in 2024.

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Business

Gold Eases from Over Two-Month Peak, Inflation Reports in Focus

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)
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Gold Eases from Over Two-Month Peak, Inflation Reports in Focus

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)

Gold ticked lower on Tuesday after hitting its highest level in more than two months, while investors focused on upcoming inflation data for clues on the U.S. interest-rate outlook.

Spot gold was down 0.3% to $4,374.82 per ounce by 0548 GMT, after hitting its highest level since June 5 earlier in the session at $4,434.84.

US gold futures rose 0.4% ‌to $4,435.00.

Gold's move higher ‌in early session trading beyond $4,400 appears to ‌be ⁠driven primarily by ⁠renewed flows into the metal and a notable shift in the metal market sentiment, said Ahmad Assiri, Research Strategist at Pepperstone.

"If this change in sentiment continues to attract further flows, it could remain an important factor in determining whether gold can consolidate around $4,400 and potentially extend the recovery towards higher levels."

The US ⁠consumer price report due on Wednesday and ‌producer price data on Thursday are ‌likely to shape monetary policy expectations after weak July US jobs ‌data last week led markets to scale back bets that ‌the Federal Reserve would raise rates next month.

At its July meeting, the Federal Reserve kept rates steady, with three officials dissenting in favor of a hike.

Lower interest rates tend to support gold as ‌bullion pays no interest.

"If the data continue to point towards a cooling economy without a meaningful ⁠resurgence in ⁠inflation, markets could further reduce expectations for tighter policy. That would likely leave the dollar vulnerable and provide another supportive backdrop for gold," Fawad Razaqzada, a market analyst at Forex.com, said in a note.

On the geopolitical front, US President Donald Trump responded to Iran's conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical escalation likely to complicate efforts to reopen the Strait of Hormuz.

Among other metals, spot silver fell 1.7% to $64.64, platinum lost 0.4% to $1,745.68 and palladium declined 0.8% to $1,372.44.

Business

Australia Ups Scrutiny of Chinese-Linked Rare Earths Investors

A truck carrying rare earth travels towards Lynas Corp's Mount Weld processing plant, northeast of Perth, in Western Australia, August 23, 2019. REUTERS/Melanie Burton
A truck carrying rare earth travels towards Lynas Corp's Mount Weld processing plant, northeast of Perth, in Western Australia, August 23, 2019. REUTERS/Melanie Burton
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Australia Ups Scrutiny of Chinese-Linked Rare Earths Investors

A truck carrying rare earth travels towards Lynas Corp's Mount Weld processing plant, northeast of Perth, in Western Australia, August 23, 2019. REUTERS/Melanie Burton
A truck carrying rare earth travels towards Lynas Corp's Mount Weld processing plant, northeast of Perth, in Western Australia, August 23, 2019. REUTERS/Melanie Burton

Australia's economy minister increased scrutiny on Monday of China-linked investors in a critical minerals project that are refusing orders to sell, jeopardizing the mine's access to US funding.

Northern Minerals has pitched its Browns Range mine as a “future cornerstone of non-China supply” of heavy rare earths dysprosium and terbium, both essential to defense and digital technologies.

But a group of China-linked shareholders have defied government orders to sell.

The company on Monday said new conditions imposed on two of those shareholders -- Hong Kong-registered Qogir and Virgin Isles-registered Real International Resources -- will require the Australian government vet any share sale they make to ensure “the acquirer of the interest is not an associate of the foreign person.”

The US has accelerated efforts to find new sources of the critical minerals after dominant supplier China restricted exports of them last year.

US President Donald Trump announced last week $3 billion in US investment in critical minerals projects, including a $400 million conditional loan from the Pentagon to an Australian rare earth mine in New South Wales.

Northern Minerals, also in talks with US government funding agencies since an October meeting between Trump and Australia's Prime Minister Anthony Albanese, has had its progress frustrated by the shareholder controversy.

In 2023 Australia's foreign investment regulator blocked a Chinese shareholder from doubling its stake in Northern Minerals on national interest grounds.

The following year, the group sought to oust the miner's management.

Economy minister Jim Chalmers in May ordered six Northern Minerals shareholders with links to China and controlling 17.5% of the company, to sell their stakes by July 2.

Three had not complied by July 14, prompting a new order preventing them from voting on company decisions.

The orders under Australia's foreign investment law do not refer explicitly to China, which is a major buyer of Australia's biggest exports of iron ore, coal and liquefied natural gas.

Beijing bristles at any move to exclude Chinese investors from Australia's rare earths sector.

Northern Minerals' executive chairman Adam Handley welcomed the new scrutiny on Monday.

And the firm said last month it considered the order for the shareholders to sell “an important step in aligning its share register with Australia's national security interests.”

 

 

Business

Acwa Field Services Acquires EthosEnergy's Steam Turbine Business

 The ACWA headquarters in the Saudi capital, Riyadh (Asharq Al-Awsat) 
 The ACWA headquarters in the Saudi capital, Riyadh (Asharq Al-Awsat) 
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Acwa Field Services Acquires EthosEnergy's Steam Turbine Business

 The ACWA headquarters in the Saudi capital, Riyadh (Asharq Al-Awsat) 
 The ACWA headquarters in the Saudi capital, Riyadh (Asharq Al-Awsat) 

Acwa Field Services, the field maintenance and technical services subsidiary of Saudi-listed Acwa, has acquired the steam turbine services business of EthosEnergy in Wrocław, Poland, the company announced on Monday.

The acquisition marks Acwa Field Services’ first entry into the European Union and forms the first step in a broader international growth strategy.

The deal transfers 85 employees, specialist equipment, intellectual property, established contracts and a contracted service backlog to Acwa Field Services, which will operate the business as Acwa Field Services Poland.

The two companies did not disclose the value of the deal, which will see Acwa Field Services acquire an established steam turbine services business with a skilled workforce, specialist equipment and a live contract base already operating in the market.

According to Acwa Field Services, the deal strengthens the company’s steam turbine field services capability, adds specialized engineering and technical expertise, and widens its execution footprint across Europe, providing a platform to grow both transactional and long-term contractual work in the region and beyond.

“Acwa Field Services is central to how we protect and extend the value of the assets we operate, while enhancing our competitiveness,” said Matthew York, President of Acwa Operations.

“This acquisition is a clear statement of intent. Owning a specialist maintenance capability, rather than contracting it out, gives us greater control over performance, cost, and reliability across our fleet,” he said.

According to York, acquiring EthosEnergy's steam turbine business in Poland gives Acwa Field Services the team, the technical depth, and the customer relationships to build a strong European service business.

EthosEnergy's Wrocław operation complements Acwa Field Services' existing offering and strengthens the platform on which the subsidiary intends to grow a portfolio of transactional and contractual work in Europe and beyond.

“As we continue reshaping EthosEnergy, this transaction supports our strategy to simplify our portfolio and strengthen our focus on core operations,” said Ana Amicarella, Chief Executive Officer of EthosEnergy.

She said the Steam Turbine Business in Wroclaw is joining an organization that aligns closely with its expertise and long-term growth ambitions.

“We are confident that, as part of Acwa, the business will continue delivering the exceptional service, technical excellence, and customer support for clients across the Oil & Gas, Power Generation, and Industrial Manufacturing sectors,” Amicarella noted.

Acwa Field Services Poland will operate as an integral part of the Acwa global group of companies, extending the subsidiary's reach into the wider power generation industry, including independent power producers, government utilities and the oil and gas sector.

Acwa's current portfolio spans 111 assets across 16 countries, representing 468.9 billion Saudi riyals ($125 billion) of assets under management, a foundation few private developers anywhere can match.