Category: Economy

The United Arab Emirates (UAE) has launched its first wind project of commercial size, making use of technology to exploit low wind speeds. The 103.5-megawatt project run by renewable energy firm Masdar is set to power more than 23,000 homes a year, spanning four locations.

The project developed by Abu Dhabi Future Energy Company PJSC – Masdar, demonstrates for the first time the latest technology and innovation to capture low wind speeds at utility scale, adopting advances in material science and aerodynamics to make wind power possible in the country. It marks the debut of cost-effective, large-scale, utility wind power on the UAE’s electricity grid, diversifying the country’s energy mix and advancing its energy transition.

The wind project will help displace around 1,20,000 tonnes of carbon dioxide or carbon footprint annually, which would be the equivalent of removing around 26,000 cars from the roads.

The four locations chosen for the project are the scenic Sir Bani Yas Island (45MW), the historical pearl-diving centre, Delma Island (27MW), and Al Sila in Abu Dhabi (27MW), and Al Halah in Fujairah (4.5MW). Home to free-roaming wildlife, Sir Bani Yas Island also has a 14 MWp (megawatt peak) solar farm.

Prime Minister Narendra Modi on October 14 announced that the governments of India and Sri Lanka are working together on fintech sector connectivity by linking Unified Payments Interface (UPI) and Lanka Pay. The Prime Minister said this in his video message aired at the launch of ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka.

PM Modi and Sri Lanka President Ranil Wickremesinghe had signed an agreement on UPI acceptance in Sri Lanka during Wickremesinghe’s two-day visit to India in July this year.

In 2022, National Payments Corporation of India (NPCI), the umbrella organisation that offers UPI services, signed a memorandum of understanding with France’s fast and secure online payment system, Lyra. In 2023, UPI and Singapore’s PayNow signed an agreement, allowing users in either country to make cross-border transactions. The UAE, Bhutan, and Nepal have already adopted the UPI payment system.

UPI recorded 10.56 billion transactions in September. It was slightly lower than the 10.58 billion transactions reported in August, the first time the instant payment mechanism crossed the 10 billion transaction mark.

India has allowed Nepal to sell the electricity generated by two of the Himalayan country’s hydropower projects in its real-time energy market, according to the Nepal Electricity Authority (NEA).

On July 31, India had opened the door to Nepal, Bhutan and Bangladesh to participate in its real time energy market by amending the ‘Procedure for approval and facilitating import/export (cross border) of electricity by the designated authority’ issued in February 2021.

The Central Electricity Authority of India has allowed trading of 44 MW of electricity generated by the 19.4 MW Lower Modi and 24.25 MW Kabeli B-1 hydropower projects in the real-time market in the first phase. Approval has been received for the sale of electricity from two projects in both the day-ahead and the real-time markets. The projects that have received approval for selling power in the day-ahead market need to get permission or be renewed every year.

Since November 2021, India has allowed Nepal to sell its power in its day-ahead market. The hilly country has been allowed to sell 522 MW of electricity in this market.

India has also started buying power from Nepal under a medium-term five-year power deal since early September. Nepal sells 110 MW of electricity to Haryana through NTPC Vidyut Vyapar Nigam Limited, India’s nodal agency for bilateral electricity trade with neighbouring countries. The NEA sold electricity worth Rs. 5.43 billion in India during the first two months of the current fiscal.

Saudi Arabia’s Saudi Aramco has increased the official selling prices (OSP) for November-loading Arab Light to Asia by 40 cents a barrel from October to $4 a barrel over Oman/Dubai quotes. The Kingdom on October 4 announced that it will continue with its voluntary output cut of 1 million barrels of oil per day (bpd) for November and until the end of December 2023.

The price hike is in accordance with the market expectations of an increase of about 45 cents, and has pushed the price for the medium sour crude to its highest level this year.

Saudi Aramco also raised the price for Extra Light crude to Asia by 50 cents in November to $3.35 a barrel over Oman/Dubai quotes, reflecting the strengthening of prices for light sour grades in the spot market. The OSPs for Arab Medium and Arab Heavy have been kept unchanged.

The voluntary cut of 1 million bpd in November and December means Saudi Arabia’s production for the final two months of the year will be approximately 9 million bpd. This reduction is in addition to the voluntary cuts the country had announced in April, when the country agreed to reduce output by 5,00,000 bpd until the end of December 2024.

The World Bank has downgraded its growth forecast for developing economies in East Asia and Pacific, citing slow growth in China and weak global demand amid high interest rates and slow trade. It now expects these economies to grow by 5% this year, slightly less than the 5.1% it had forecasted in April. For 2024, the bank expects growth in the region to be 4.5%, down from the earlier forecast of 4.8%.

The Washington-based multilateral bank has left its 2023 economic growth forecast for China unchanged at 5.1%, but reduced its 2024 estimate to 4.4% from 4.8%. It pointed at longer-term structural factors, elevated debt levels in China and weakness in its property sector as reasons for the downgrade.

Even though East Asian economies have mostly recovered from the series of shocks since 2020, including the COVID-19 pandemic, and will continue to grow, the World Bank said the pace of growth will likely slow. It flagged the significant increase in general government debt, as well as the rapid jump in corporate debt levels, particularly in China, Thailand and Vietnam.

The bank warned that high government debt levels can limit both public and private investment. Elevated debt could lead to higher interest rates, which would increase the cost of borrowing for private businesses, it added.

The ongoing 2023 ICC Men’s Cricket World Cup may boost the host country India’s economy by as much as ₹22,000 crore ($2.6 billion), according to an estimate from the Bank of Baroda.

The quadrennial tournament, which began on October 5 and will continue until November 19, is expected to attract a large number of fans from India and abroad. With matches being played across 10 cities, the championship is likely to benefit other sectors such as tourism and hospitality, said the economists working with the bank on October 4.

The ICC Cricket World Cup, hosted in India for the first time since 2011, coincides with the three-month festive season that began in September. It will particularly benefit the retail sector, as many people are expected to make sentimental merchandise purchases, underlined the economists.

The total Indian viewership for the tournament, including both on television and streaming platforms, is expected to be significantly larger than the 552 million viewers recorded in 2019. It may generate ₹10,500 crore to ₹12,000 crore in TV rights and sponsorship revenue on a conservative basis, the Bank of Baroda team said.

However, the economists also warned that the World Cup may lead to inflation, with airline ticket and hotel rental prices surging during the period, along with service charges in the informal sector in the host cities. The researchers expect inflation to rise between 0.15% and 0.25% for October and November overall.

The United Arab Emirates (UAE) and India will cooperate more closely in sustainable industrial development following a memorandum of understanding (MoU) signed on October 5 in Abu Dhabi.

The MoU was signed by His Excellency Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Piyush Goyal, India’s Minister of Commerce and Industry, in the presence of His Highness Sheikh Hamed bin Zayed Al Nahyan, Member of the Abu Dhabi Executive Council.

Focusing on facilitating industrial investments, technology transfer and enabling the deployment of key technologies in industries, the MoU will benefit both countries through joint industrial and technological developments. It focuses on seven key areas of supply chain resilience, renewable energy and energy efficiency, health and life sciences, space systems, AI, Industry 4.0 and advanced technologies, and standardisation and metrology.

Under the MoU, the UAE and India will also collaborate in the deployment of 4IR technologies in industry, real-time data processing, the development of machine-to-machine control systems, the development of autonomous robotics, equipment and vehicles, as well as the deployment of additive manufacturing in key industries.

Both the sides reviewed and strengthened existing collaborations, and explored new opportunities for their bilateral partnerships.

On October 4, the Reserve Bank of India (RBI) took action in the foreign exchange market by selling dollars to prevent the Indian rupee from plummeting to an all-time low.

The rupee, facing challenges from increased US Treasury yields and a strengthened US dollar, concluded the day at 83.24 against the dollar, slightly weaker compared to the previous closing rate of 83.21. During the day, the domestic unit depreciated to 83.27 per dollar, just shy of the record intraday low of 83.29.

Dealers estimate that state-run banks, acting on behalf of the RBI, sold approximately $500 million to stabilise the situation.

Despite these challenges, a resilient domestic economic outlook has helped keep the Indian bond market afloat. On October 4, the yield on the benchmark 10-year government bond remained steady at 7.24%, matching the rate from the previous day. Nevertheless, India’s benchmark stock indices, Sensex and Nifty50, dropped to their lowest point in over a month due to widespread selling.

In comparison to other Asian currencies on October 4, the Indian rupee outperformed peers like the Indonesian rupiah, Malaysian ringgit, and Thai baht but lagged behind the Japanese yen, Taiwanese dollar, the Chinese offshore yuan, and a few others. Market participants anticipate that the rupee will continue to trade within the range of 83.05 to 83.30 against the US dollar for the time being.

The people in one of the wealthiest nations in the world, Luxembourg are crossing borders to live in neighbouring countries such as Germany, Belgium or France to seek affordable rent.

Luxembourg faces a dire housing crisis. With sky-high prices for homes and rentals, even people with good incomes find it difficult to secure affordable housing. Residents are moving to neighbouring countries due to more reasonable property costs. Despite Luxembourg’s strong economy, the housing market has created significant challenges.

There are people who have waited five years for social housing, underlining the shortage of affordable options, especially for young people and single-parent families. The issue has led many Luxembourgers to move abroad, despite the nation’s thriving financial services sector.

The housing problem is striking in a country with the EU’s highest average earnings, estimated at €47,000 annually in 2022. In Luxembourg City, new apartments can cost around €13,000 per square meter, while older ones go for €10,700. The average house price is €1.5 million. Rents have surged by 6.7% between June 2022 and June 2023 outpacing inflation.

A lack of inheritance tax and nominal duties has encouraged landowners to hold onto property without development. Around 0.5% of residents, or 3,000 individuals, own half of the buildable land. High demand from foreign workers and the unequal housing market further inflate costs.

Singapore’s digital economy contributed 17.3% to its gross domestic product (GDP) in 2022, marking a significant increase from the 13% contribution in 2017, according to a report released on October 6. This represents nearly a doubling of its value added or economic contribution, rising from S$58 billion to S$106 billion over the five-year period, as reported by the Infocomm Media Development Authority (IMDA).

Between 2017 and 2022, the digital economy’s contribution rose by $48 billion. Among sectors, Information and Communications (I&C) played the most substantial role in Singapore’s economy, contributing $33 billion, which accounted for 5.4% of the GDP in 2022. In 2017, I&C contributed $19 billion, equivalent to 4.3% of GDP. IMDA identified I&C as the fastest-growing sector between 2017 and 2022.

IMDA’s inaugural Singapore Digital Economy report was developed in collaboration with the Lee Kuan Yew School of Public Policy. The report also revealed that technology adoption rates among Small and Medium Enterprises (SMEs) increased significantly, rising from 74% in 2018 to 94% in 2022. Additionally, the average technology adoption intensity by SMEs increased from 1.7 to 2.1 over the same period.

The expansion of the digital economy has led to the growth of the tech workforce in Singapore. The number of tech professionals increased from approximately 155,500 in 2017 to 201,100 in 2022, driven by demand across all sectors.