Category: Economy

The gross domestic product of the Kingdom of Saudi Arabia grew by 1.1% in the second quarter of 2023 compared to the same period in 2022 due to non-oil activities that increased by 5.5% annually in the quarter.

The non-oil sector is a focus area under Saudi Arabia’s Vision 2030, as the Kingdom aspires to steadily diversify its economy that has been dependent on oil for several decades. 

According to General Authority for Statistics (GASTAT), government services activities increased by 2.7% in the second quarter, while oil activities dipped by 4.2% on an annual basis.

The fall in oil activities was chiefly due to the decision taken by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to reduce oil output by 1.2 million barrels per day. In the cuts, Saudi Arabia pledged to reduce output by 500,000 bpd. The country also announced an additional cut of 1 million bpd for the month of July in June.

The International Monetary Fund, citing prolonged oil output cuts, slashed its 2023 GDP growth projection for Saudi Arabia to 1.9% in June. In its World Economic Outlook update, the IMF revised its growth forecast for the country to 2.1% in June from its earlier prediction of 3.1% in May.  

The International Monetary Fund (IMF) has said that it would “encourage” India to remove restrictions on export of a certain category of rice. The restrictions could exacerbate food price inflation and should be reversed, said the International Monetary Fund Chief Economist Pierre-Olivier Gourinchas in Washington on July 25.

On July 20, The Government of India had banned the export of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season. This type of rice constitutes about 25 percent of the total rice exported from India. The Union Food Ministry, in a statement, had said that there would be no change in export policy of par-boiled non-basmati rice and basmati rice, which forms the bulk of exports. Gourinchas said that, in the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world, and can also lead to retaliatory measures.

The total exports of non-basmati white rice from India was $4.2 million in 2022-23 as against $2.62 million in the preceding year. Major destinations of India’s non-basmati white rice exports include the US, Thailand, Italy, Spain and Sri Lanka.

To ensure adequate availability of non-basmati white rice in the domestic market and alleviate the rise in local prices, the Government has amended the export policy from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect.

Saudi Arabia’s Public Investment Fund (PIF) has signed a Memorandum of Understanding (MoU) with the Oman Investment Authority (OIA) and plans investments worth $5 billion in Oman.

The MoU aims at expanding cooperation and investment between the two investment entities, enabling new and promising investments in Oman’s rapidly growing economy. It follows the establishment of the Saudi Omani Investment Company, to allocate $5 billion for investments across various promising sectors in Oman. In addition, the PIF’s investment portfolio will be expanded in the Omani market, to stimulate investments in the country due to new international strategic economic partnerships.

Oman is one of the fastest-growing economies in the Middle East and North Africa region. The PIF also seeks to increase its investments in the Gulf nation through different asset classes within targeted sectors.

The MoU was signed in Riyadh and was attended by OIA President Abdulsalam Al Murshidi, PIF Governor Yasir Al Rumayyan, Ambassador of Oman to Saudi Arabia HH Sayyid Faisal Al Said, and Undersecretary for Investment Promotion at the Ministry of Commerce, Industry, and Investment Promotion Ibtisam Al Farooji. Based on the MoU, OIA will explore investment opportunities and provide support to PIF.

Al Murshidi in a statement called the memorandum a confirmation of the commitment of Oman and Saudi Arabia to strengthen partnerships and an endeavour to enhance economic integration, achieve sustainable development and advance economic investments in the region.

The Government of India has launched the Central Registrar of Cooperative Societies (CRCS)-Sahara Refund Portal to refund the hard-earned money of crores of depositors in four cooperative societies of Sahara Group in about 45 days.

Calling the portal a historic moment, Cooperation Minister of India Amit Shah on July 18 said that this is the first time when depositors are getting refunds in a case where multiple government agencies are involved and each one has done a seizure.

On March 29, the Government of India had said that money will be returned to 10 crore investors of the four cooperative societies within nine months. The announcement followed a Supreme Court order directing transfer of Rs 5,000 crore from Sahara-Sebi refund account to the CRCS.

To begin with, the depositors would get up to Rs 10,000 refund. Subsequently, the amount would be enhanced for those who have invested higher amounts. The corpus of Rs 5,000 crore would be able to take care of the needs of 1.7 crore depositors in the first phase.

About 2.5 crore people have deposits of up to Rs 30,000 in the four cooperative societies, namely Sahara Credit Cooperative Society Ltd, Saharayn Universal Multipurpose Society Ltd, Humara India Credit Cooperative Society Ltd, and Stars Multipurpose Cooperative Society Ltd.

The portal is developed by a subsidiary of IFCI and requires the depositor’s Aadhaar registration with mobile and Aadhaar-linking with the bank account where refund is to be deposited.

South Africa has started a fund to help the government fast-track electricity-generation projects needed to end a crippling energy crisis.

The Energy One Stop Shop and Resilience Fund will aim to streamline regulatory processes needed for private investment in electricity production and help accelerate the approval of projects, said Trade, Industry and Competition Minister Ebrahim Patel at a virtual launch on July 27.

The Energy One-Stop Shop will start with dedicated personnel, a website, a registration portal for energy projects, and a mapped process showing where a project is in the approval process. The Energy Resilience Fund will mitigate the impact of the energy crisis.

South Africa has been facing blackouts, or load-shedding, since 2008 because the state power utility’s old coal-fired plants that supply more than 80 percent of the nation’s electricity regularly break down.

The Industrial Development Corp., the National Empowerment Fund and the Department of Trade, Industry and Competition have set aside funds to assist companies with energy-related challenges, and have so far approved disbursements of 294 million rand ($16 million), the department said. The Presidency is exploring ways to simplify these processes to address blockages, said Patel.

Saudi Arabia’s Public Investment Fund (PIF) has established the Saudi Tourism Investment Company, or Asfar, to support the growth of the Kingdom’s ​​tourism sector.

Asfar will invest in new tourism projects and develop destinations with hospitality, tourist attractions, retail, and food and beverage offerings in cities across the country, the PIF said in a statement on July 27.

In addition to offering co-investment opportunities to the private sector, the new company aims to create a supportive environment for local suppliers, contractors, and small and medium-sized enterprises. Another priority is to create a competitive environment that will boost the variety and quality of the hospitality and tourism sector.

Asfar will enable each Saudi Arabian city to make its tourism unique, diversifying and enriching their tourism and entertainment experience, the statement read.

Under the leadership of Crown Prince Mohammed bin Salman, Saudi Arabia is implementing social reforms together with the economic agenda to help modernise its cities, such as by holding music concerts, opening cinemas, and allowing women to drive. The country’s economy rose 8.7 percent last year, growing 3.8 percent in the first quarter on an annual basis due to growth in the non-oil sector.

One of the world’s largest sovereign wealth funds, the PIF is at the core of the Saudi Vision 2030 initiative to diversify the country’s economy from hydrocarbons. Under the vision, the gulf nation is developing non-oil sectors such as entertainment, culture and sports to create jobs, boost quality of life, and attract skilled talent and tourists.

India has joined Switzerland and the United Kingdom in the number of companies with over $150 billion market capitalisation.

While the US tops the list with 51 companies, with market valuations of a minimum of $150 billion, China and France follow next with six and four companies, respectively.

In India, the merger of HDFC twins has created a third Indian company to have a market capitalisation of at least $150 billion. This feat till now was enjoyed by two companies — Reliance Industries Ltd (RIL) and Tata Consultancy Services (TCS). Now, three nations — India, Switzerland, and the UK — each have three companies with a market capitalisation of greater than $150 billion, according to Bloomberg data.

On July 17, the bank’s market capitalisation crossed $150 billion, making it bigger than Morgan Stanley, Goldman Sachs and Bank of China. Days after its merger with HDFC Ltd, HDFC Bank on Monday joined the exclusive club of companies with a market capitalisation of $100 billion. This makes it the seventh-largest lender globally.

Currently, JP Morgan is the largest bank, with a market cap of $438 million. It is followed by Bank of America ($232 billion) and China’s ICBC ($224 billion).

Prime Minister Narendra Modi on July 26 inaugurated the International Exhibition-cum-Convention Centre (IECC) complex at Pragati Maidan in New Delhi.  The redeveloped complex is the venue of the G20 Summit in September.

The Prime Minister also felicitated the ‘shramjeevis,’ who built the new complex and performed ‘puja’ ahead of the inauguration of the complex, which has been developed at a cost of about ₹2,700 crore. The facility, with a campus area of nearly 123 acres, has been built after an overhaul of the old and outdated structures in the area. Owned by India Trade Promotion Organisation, the Pragati Maidan project was executed by NBCC (India) Ltd and its contractor.

Bringing state-of-the-art facilities together with traditional art, the new IECC is set to be India’s largest MICE (Meetings, Incentives, Conferences, and Exhibitions) destination. In terms of the covered space available for events, the complex finds its place among the top exhibitions and convention complexes in the world, the PMO statement said. It will be competing with the Hannover Exhibition Centre in Germany and the National Exhibition and Convention Center (NECC) in Shanghai.

The new complex has several state-of-the-art facilities such as the convention centre, exhibition halls and amphitheatres. The Level 3 of the convention centre can seat 7,000 individuals, making it even larger than the approximately 5,500 people who can be seated at the iconic Sydney Opera House in Australia.

German Minister of Labour and Social Affairs Hubertus Heil has said that he wants to encourage skilled professionals from India to come to Germany. In India for the G20 summit from July 17-22 , Heil added that Germany’s new immigration law makes it easier for students and professionals to move to the country, adding that they need “smart brains and helping hands” for their economy.

Heil called India an important partner for Germany and stressed that it is important for both countries to seek solutions together. “In the long term, we could achieve cross-national comparability and recognition of qualifications. At the same time, I use the trip to India to find out more about the potential for skilled workers and to promote Germany as an attractive location with good working and living conditions,” said the statement of Minister Hubertus Heil.

Germany and India are already cooperating in recruiting skilled workers, with the idea of such a move being beneficial for both the nations and avoiding brain drain. The German Federal Employment Agency and the German Society for International Cooperation have been recruiting nursing staff from the Indian state of Kerala since 2022. In February 2023, German Chancellor Olaf Scholz said that the country wants to simplify the rules for Indian IT work experts who wish to obtain work visas.

A record 13.5 crore people moved out of multidimensional poverty between 2015-16 and 2019-21, said a report released by NITI Aayog on July 17.

According to the report, National Multidimensional Poverty Index: A Progress Review 2023, India registered a significant decline in the number of multi-dimensionally poor from 24.85 percent in 2015-16 to 14.96 percent in 2019-2021, the report said. During this period, rural areas witnessed the fastest decline in poverty from 32.59 percent to 19.28 percent, it added.

The National MPI measures simultaneous deprivations across the three equally weighted dimensions of health, education, and standard of living that are represented by 12 SDG-aligned indicators. These include nutrition, child and adolescent mortality, maternal health, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets, and bank accounts. Marked improvement is witnessed across all the 12 indicators.

During the same period, the urban areas saw a reduction in poverty from 8.65 percent to 5.27 percent. Uttar Pradesh registered the highest decline in the number of poor with 3.43 crore, followed by Bihar, Madhya Pradesh, Odisha, and Rajasthan.

The report provides multidimensional poverty estimates for the 36 States and Union Territories and 707 Administrative Districts.