Category: Economy

Saudi Arabia’s real gross domestic product increased by 12.2% in the second quarter compared with last year’s second quarter, according to data published on Wednesday. The kingdom, which is the world’s largest oil exporter, gains an advantage due to escalating crude prices and a post-pandemic recuperation.

The government had expected a growth of 11.8% at the end of July, but the growth figure in the second quarter exceeded the estimate. The economy improved by 2.2% from the first quarter.

“The growth is mainly due to the high increase in oil activities by 22.9% y-o-y,” the General Authority for Statistics said. The oil economy grew 4.4% from the first quarter to the second quarter.

Non-oil activities saw an increase of 8.2% on a yearly basis and 4.5% from the first quarter. Government activities grew by 2.4% in the first six months of 2022, a 0.4% rise compared to the first quarter.

The American services sector grew at a somewhat quick pace in August amid indications of easing supply issues and decelerating price gains, according to an industry survey released on Tuesday.

The Institute for Supply Management’s services index went up to 56.9 percent, a little above the July level, flouting expectations of a decline. The new orders index rose 1.9 percentage points, and employment jumped 1.1 points, ISM said, while prices went down 0.8.

“The services sector had a slight uptick in growth for the month of August due to increases in business activity, new orders, and employment,” ISM survey chair Anthony Nieves said in a statement.

Companies replying to the survey noted “some supply chain, logistics and cost improvements; however, material shortages remain a challenge,” he said. A hopeful prospect was that “employment improved slightly despite a restricted labor market.”

Two-thirds of the US economy depends on the service sector, which comprises a large variety of services, from education to IT to medicine.

Even in the middle of very high US inflation, the sector has expanded steadily for 151 months, except for a two-month decline as the United States battled with the coronavirus pandemic in April and May 2020.

In the last fiscal year, India’s exports of goods and services surpassed USD 675 billion, and the country aims to increase international trade to USD 2 trillion by 2030, according to Commerce and Industry Minister Piyush Goyal.

While speaking with faculty, researchers, and students at Stanford University here, Goyal said India’s economy would be worth USD 30 trillion by the time it celebrates its 100th anniversary.

He continued by saying, “In a business as usual scenario, when India will be celebrating its 100th anniversary of independence in 2047-2050, we will have a USD 30 trillion economies and perhaps a USD 35-45 trillion economy if some of the aggressive plans the government is putting together work out. Goyal said that’s what he aims to bring to the table.

Only the US, China, Japan, and Germany have larger economies than India, with a GDP of USD 3.3 trillion. As compared to the UK, India ranked 11th among large economies a decade ago. During the June quarter, the Indian economy expanded 13.5%, surpassing the UK, which fell to sixth place.

A lot of effort has been put into laying the foundation on which the country can rapidly transform, grow its economy, improve its systems, and engage in technology in the last few years, according to Goyal. Over the past year, we saw some successes in our international engagement, with exports of goods and services reaching USD 675 billion for the first time.

A minister added that we aim to increase our international trade to about USD 2 trillion by 2030.

In August, the non-oil private sector in Saudi Arabia grew faster than it had in October of last year as business activity improved.

The Saudi Arabian S&P purchasing managers’ index (PMI) for the entire economy rose to 57.7 in August from 56.3 in July, breaking above the series average of 56.8 since 2009. A reading above 50.0 indicates that activity is expanding.

David Owen of S&P Global Market Intelligence wrote, “Saudi Arabia’s PMI pointed to increased resilience in the non-oil economy during August as business activity and sales continued to grow strongly despite reports of increased global economic concern.”

Since the pandemic, the number of new orders has increased at the fastest rate since October last year, driven by improved customer demand, higher exports, and overall economic recovery. The rise in new orders was fueled by a strong increase in export orders, although the pace was a little slower than July’s eight-month high.

According to the series average of 61.4, the manufacturing sub-index rose to 61.5 in August from 59.9 in July. For the second consecutive month, input cost growth slowed, roughly in line with the series average. This is the fifth consecutive month that the employment sub-index has increased, albeit marginally and at a slower pace than in July.

India’s gross domestic product (GDP) witnessed a two-digit growth of 13.5% in the first quarter of the 2022-2023 financial year at a time when powerful economies around the globe are finding it difficult and the giant Chinese economy is crawling towards a declining economic activity.  The reason for India’s economic success is the carefully assessed implementation of fiscal and monetary measures announced by the Narendra Modi government after the 2020 COVID-19 outbreak in the country.

Another reason for India’s good performance is the Modi government’s aim on protecting the poor through PM Gareeb Kalyan Yojana, easy loans to micro, small and medium enterprises (MSMEs), better public funding for capital expenditure, and exciting private investments, such as told by government officials and experts.

“Modi government’s capital expenditure during Q1 of FY23 stands at ₹1.75 lakh crore, which is equivalent to capital expenditure in the whole financial year of 2013-14 during the Congress-led United Progressive Alliance (UPA) era,” one of them said.

India’s Private Final Consumption Expenditure (PFCE) in the first quarter of the current fiscal year stands at Rs 22 lakh crore, which is a 10% increase as compared to pre-pandemic levels of Rs 20 lakh crore in 2019-20, showing a slow but steady increase in household consumption despite Covid-19 disturbances, he said.

Dubai’s property market surged in the first six months of 2022 as investors came in large numbers, with Russia being in the top five buyers list as the gulf country takes advantage of an influx of wealth due to Western sanctions.

The first half of the year witnessed residential real estate transactions surge 60 percent with an 85 percent increase in the value of properties sold, property consultancy Betterhomes said in a report.

The top five buyers belonged to India, the United Kingdom, Italy, Russia, and France, in that order, followed by Canada, the United Arab Emirates, Pakistan and Egypt tied in eighth place, Lebanon, and China.

The number of Russian buyers moved up 164 percent in the first six months of this year from the first half of 2021, Betterhomes said. The numbers for France and Britain increased by 42 percent and 18 percent, respectively, while those from India dropped 8 percent and Italy fell 17 percent.

The geopolitical instability in Europe led to the increased demand and mortgage buyers looking to get in ahead of interest rate hikes, Betterhomes said.

Earlier this year, Reuters reported Russians were investing money into Dubai properties, seeking financial shelter in the wake of Western sanctions on Moscow over its invasion of Ukraine.

India has said it will help reinforce peace and prosperity in the Middle East and is confident to contribute significantly to economic growth, food security, and energy in the region and South Asia, through the newly formed I2U2 grouping.

 I2U2 comprises four countries India, Israel, the UAE, and the US. “I” stands for India and Israel and “U” for the US and UAE.

Prime Minister Narendra Modi attended the coalition’s first virtual summit on July 14, alongside US President Joe Biden, Israeli Premier Yair Lapid, and UAE President Mohammed bin Zayed Al Nahyan. Modi said the organization has constructed a positive plan of work and its framework is a good example of practical cooperation in the wake of increasing global unpredictability. The leaders agreed to augment joint investment in six important areas of water, energy, transport, space, and health and food security.

After the first virtual meeting, a joint statement said this “unique grouping of countries aims to harness the vibrancy of our societies and entrepreneurial spirit to tackle some of the greatest challenges confronting our world, with a particular focus on joint investments and new initiatives in water, energy, transportation, space, health, and food security”.

More than 300 apartments in Almajdiah Residence’s new Riyadh complex were sold for cash within a month, without the company having to advertise.

As Saudi Arabia is the world’s largest oil exporter, it’s no wonder the property market is booming thanks to high energy prices. According to Almajdiah’s CEO, Abdulsalam Almajed, the rush for the homes reflects more than just a property shortage; it reflects a social and economic shift accelerating the crown prince’s overhaul initiative.

Almajed said, “There has been a change in mindset”. He runs a family-owned development firm that caters to Saudis who are more open-minded, he added “today, Saudi designs are filled with beautiful creativity.”

After being elevated by King Salman in 2015, Mohammed bin Salman has centralized power and intensified political repression. As well as ending or relaxing restrictions on entertainment and mixing men and women, he is trying to curb dependence on oil.

It was not uncommon for property owners to refuse to rent to women ten years ago when a male guardian was required to approve many of their life decisions. 30% of Almajdiah’s buyers are female, buying investment properties or their own homes. Women are entering the workforce in significant numbers today.

A report by OPEC stated that the demand for petroleum products like petrol and diesel in India will rise by 7.73 percent in 2023. India’s demand for oil products is expected to increase from 4.77 million barrels per day (BPD) in 2022 to 5.14 million BPD in 2023, as mentioned by OPEC in its monthly oil report.

The demand rise is the fastest in the world, followed by 1.23 percent in China, 3.39 percent in the US, and Europe’s 4.62 percent.

After the US and China, India is the third largest oil importing and consuming country in the world. The demand for petroleum products in India is mainly due to the steady economic growth of 7.1 percent, several economic reopening, and ease of trade-related bottlenecks offering mobility and industrial sector activity.

The report said the oil demand may go down between July-September because of the monsoon but will rise in the next quarter.

“Overall, based on the most recent trends, demand for diesel and jet kerosene would likely account for a bigger part of the growth in demand in H2 as consumption of these two products had fallen sharply due to the pandemic,” it said. It added, “In terms of crude imports by source, Kpler data shows Russia moving up to be the top supplier of crude to India in June, securing a 24 percent share.”

On Wednesday, U.S. officials announced that new trade talks would be launched with Taiwan, just days after the Biden administration excluded the Chinese-claimed island from its economic plan to counter China’s influence in Asia.

During a phone briefing, two senior U.S. administration officials told reporters that Washington and Taipei would “move quickly” to develop a roadmap for the planned US-Taiwan Initiative on 21st-Century Trade in the coming weeks. The initiative will be followed by in-person meetings in June in the US capital.

The initiative will address the issues of customs facilitation, fighting corruption, common standards for digital trade, labor rights, high environmental standards, and efforts to curb state-owned enterprises and non-market practices. The initiative aims to “do this by reaching an agreement with high standard commitments that create inclusive and durable prosperity.”

In some ways, the bilateral initiative resembles the U.S. government’s Indo-Pacific Economic Framework (IPEF), which Biden launched during a visit to Seoul and Tokyo last week. Although Taiwan is democratically self-governed, the United States has not invited it to the IPEF talks.

A U.S official said the trade talks with Taiwan would complement several existing dialogues with Taiwan, including one involving export controls and other supply chain issues.