Makkah Businesses See Hajj Boom Ending Pandemic Slump

Most of the pilgrims, 850,000, are coming from abroad, and pilgrimages are usually a significant revenue earner for Saudi Arabia - AFP
Most of the pilgrims, 850,000, are coming from abroad, and pilgrimages are usually a significant revenue earner for Saudi Arabia - AFP
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Makkah Businesses See Hajj Boom Ending Pandemic Slump

Most of the pilgrims, 850,000, are coming from abroad, and pilgrimages are usually a significant revenue earner for Saudi Arabia - AFP
Most of the pilgrims, 850,000, are coming from abroad, and pilgrimages are usually a significant revenue earner for Saudi Arabia - AFP

"Business is back", exclaims Abdullah Mekhlafi at the shop where he sells prayer mats in Islam's holiest city, which is preparing for the biggest influx of hajj pilgrims since the coronavirus pandemic began.

Two years of drastic restrictions on the number of pilgrims who could perform the hajj emptied shops and hotels across the Saudi Arabian city of Makkah. But business owners are hoping for a quick recovery as hundreds of thousands of worshippers flock to the region this week.

"We had few customers (during the last two hajj seasons), but today business is back, thanks to God. It's the same as before, and even better," 30-year-old Mekhlafi told AFP.

One million people, including 850,000 from abroad, will be allowed at this year's hajj, one of five pillars of Islam which all able-bodied Muslims with the means are required to perform at least once in their lives.

In 2019, about 2.5 million people took part in the rituals, which include circling the Kaaba at the Grand Mosque in Makkah, gathering at Mount Arafat and "stoning the devil" in Mina.

The following year, after the pandemic took hold, foreigners were barred and the total number of worshippers was capped at 10,000 to stop the hajj from turning into a global super-spreader.

That figure rose to 60,000 fully vaccinated Saudi citizens and residents in 2021.

The hajj, which costs at least $5,000 per person, and umrah pilgrimages that occur at other times of year are usually a significant revenue earner for Saudi Arabia, especially its tourism sector.

In normal times, they generate about $12 billion (11.5 billion euros) annually, keeping the economy humming in Makkah.

The city has seen a construction boom in recent years that has brought new shopping malls, apartment buildings and luxury hotels -- some offering spectacular views of the sacred Kaaba, the large black cubic structure at the center of the Grand Mosque towards which all Muslims pray.

But these projects were starved for clients during the pandemic, meaning their owners were cheered by scenes already unfolding in Makkah on Monday, two days before the hajj officially begins.

White-robed worshippers were flocking to souvenir and barber shops across the city of two million.

And the main shopping center near the Grand Mosque, where many hotels are located, was buzzing with pilgrims again, a far cry from a year ago when the area looked nearly abandoned.

Amin, a perfume shop owner, was bullish about his prospects, telling AFP his losses could be recovered this year.

"There is a huge difference between this year and past ones. This year we can see a lot of pilgrims who are bringing back the glory to the Grand Mosque," he said.

"The losses were big, but now things are better."

During the pandemic, the kingdom faced a sharp downturn in oil prices due to a collapse in global demand, which triggered austerity measures including the tripling of a value added tax.

Particularly after Russia's invasion of Ukraine in February, things seem to have changed.

In early May, Saudi Arabia reported its fastest economic growth rate in a decade, as a surging oil sector fueled a 9.6 percent rise in the first quarter over the same period of 2021.

"The impact of the losses during the last two years was significant, but we are starting to see a recovery on the business level, and this year's (hajj) is good news," said Salem Ali Shahran, operations manager at the biggest hotel chain in Makkah.

"The current numbers have reached 40 percent of their 2019 levels. We hope for bigger numbers in the coming years."

Saudi Arabia's GDP is expected to grow by 7.6 percent in 2022, the International Monetary Fund said in April.

The world's biggest oil exporter is trying to diversify its economy, a main pillar of the Vision 2030 reform agenda pushed by Crown Prince Mohammed bin Salman.

Tourism is a crucial component of that plan, making a booming hajj all the more important.

The current goal is for Saudi Arabia to triple foreign tourism this year as pandemic restrictions ease, Ahmed Al Khateeb, the tourism minister, told AFP in an interview last month.

Of the 100 million foreign and domestic tourists targeted for 2030, 30 million are expected to be making religious trips, largely to Makkah and Medina, Islam's two holiest sites.



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.