Category: Economy

Egypt has signed partnerships for its Nexus of Water-Food-Energy (NWFE) programme to support the implementation of climate projects with investments worth $15 billion, the country said in a statement issued from the presidency of United Nations’ conference on climate change, COP27, currently underway in its seaside resort of Sharm el-Sheikh.

The projects to be funded include one energy project worth $10 billion and eight food security, agriculture, irrigation, and water projects.

Environment Minister Yasmine Fouad on Wednesday said that funding is a major challenge, but access must be given to African nations to “bridge the gaps between the needs and climate funding.” Speaking at an event to facilitate access to climate funding at the United Nations conference on climate change, the Egyptian minister said that Africa needs up to $41.6 trillion to address the devastating impacts of climate change by the end of the decade.

Finance was in the spotlight at the COP27 climate talks on Wednesday, with UN experts publishing a list of projects worth $120 billion that investors could support to help poorer countries cut emissions and adapt to the impacts of global warming. In other deals signed, France and Germany signed loan agreements to extend 300 million euros ($300.69 million) in concessional financing to South Africa to support its shift away from coal-fired power.

The Japanese cabinet led by Prime Minister Fumio Kishida on Tuesday approved a 29.1 trillion yen ($198 billion) extra budget to fund an economic stimulus package to ease the impact of inflation on the country. This is the second supplementary budget for the year ending in March.

The extra budget consisted of steps to help people cope with rising costs of electricity, gas, and gasoline. The other objective was to help various regions take advantage of the weak yen to attract tourists. The budget also kept aside money for an emergency budget reserve. The government will now present the budget to parliament for approval.

The Ministry of Finance (MOF) said that an additional 22.8 trillion yen of new debt would be issued to help cover the latest supplementary budget, leading to new borrowing of 62.5 trillion yen this financial year. The latest measures taken by the government bring the total budgeted spending for this year to more than 139.2 trillion yen.

While Japan has opted to give stimulus, most other major world economies are following policies to control inflation. In response, Japanese Finance Minister Shunichi Suzuki told reporters, “There’s no doubt our response is making the fiscal situation more severe. While exiting exceptional response to coronavirus in a shift towards normalisation, we must conduct responsible economic and fiscal management.”

Saudi Arabia on Monday committed $2.5 billion to a green initiative in the Middle East for the period of the next ten years at the ongoing COP27 UN climate summit in Egypt. Saudi Crown Prince Mohammed bin Salman said that the kingdom aims to fulfill the goal of providing sustainable energy systems for the world, adding that his country would build a headquarters for the initiative.

Saudi Arabia aims to generate about 50% of its electricity from renewable energy by 2050. The Crown Prince and the new Saudi Arabian prime minister promised that his government plans to slash 44 million tonnes of carbon dioxide by 2035.

The funding committed by Saudi Arabia at the COP27 UN climate summit will come from the kingdom’s sovereign wealth fund, the Public Investment Fund. The country also announced that it will target net zero emissions through sustainable development by 2050.

Mohammed bin Salman also unveiled his plans of “planting 50 billion trees to increase the area covered with trees 12 times and the reclamation of 200 million hectares of degraded land, reducing 2.5 percent of global emissions”. Another 10 billion trees will be planted under a separate green initiative.

The UAE President, His Highness Sheikh Mohamed bin Zayed Al Nahyan, has said that the UAE will remain a supplier of oil and gas for “as long as the world is in need”. The leader was speaking at the COP27 summit in Egypt on Monday.

“The UAE is considered a responsible supplier of energy, and it will continue playing this role for as long as the world is in need of oil and gas,” he added.

The UAE will host next year’s COP28 summit in Dubai’s Expo City. The summit will include the “first evaluation of the implementation of the Paris Climate Accords,” he said. The UAE leader met many heads of state and officials on the sidelines of the COP27 conference. He held talks with Isaac Herzog, President of Israel; Macky Sall, President of Senegal; UK Prime Minister Rishi Sunak; and the Managing Director of the International Monetary Fund, Kristalina Georgieva.

The discussions between the leaders and other COP27 participants covered a range of topics, including the significance of international cooperation and collaboration to reach practical climate change solutions that facilitate sustainable development for all.

India’s Chief Economic Advisor (CEA) Dr V Anantha Nageswaran on Saturday said that the country’s economy is poised to grow by 6.5 to 7% in the medium term until 2030. He also asserted that it was too early to rejoice the growth and the people must work hard to strengthen the economy, as the country faces global shocks with better balance sheets.

The CEA to the government said that India is in a stable situation and the growth momentum is good regardless of the multiple crises taking place globally. He was speaking virtually at the annual session of the Indian Chamber of Commerce (ICC). He said that the world is going through a ‘polycrisis’, which is multiple crises of high inflation, tightening of monetary policy, high interest rates, slowdown in China that has affected global supply chain, and the Russia-Ukraine war. Despite these challenges, India’s borrowing cost is lower than countries which have better ratings than India, he added.

Dr V Anantha Nageswaran credited the country’s better household, corporate and financial sector balance sheets for the good medium term growth outlook. India will have a growth rate of 6.5-7 per cent in 2022-23, which is considered to be good despite a high inflation rate of 7.4 per cent, he said.

Saudi Aramco has cut its key Arab Light grade for December sales to Asia by 40 cents to $5.45 a barrel above the regional benchmark. The world’s largest oil producer has lowered most oil prices for Asia – its biggest market – in response to regional market weakening. Energy consumption has been affected by rising interest rates and stringent COVID-19 lockdowns in China, leading to a 20% drop in crude futures since June.

Meanwhile, ICE Brent is trading above $95 a barrel in hope of a fall in Russian exports once the European Union tightens sanctions on 5 December. The Organization of Petroleum Exporting Countries and its partners (OPEC+), a 23-nation alliance led by the Saudis and Russia, will also reduce output from this month.

State-controlled Saudi Aramco has raised prices for European buyers, who may find it difficult to get alternative oil once the ban on imports from Russia is in place. Saudi Arabia has left pricing for the US unchanged.

Saudi Arabia sells most of its oil under long-term contracts to Asia. China, Japan, South Korea and India are the biggest buyers of its oil. The pricing of the oil is reviewed each month.

The United Arab Emirates’ non-oil private sector continued its upward stride in October, with growth recorded at a rate close to August’s three-year high and employment expanding at its fastest in six years.

The S&P Global UAE Purchasing Managers’ Index (PMI) increased to 56.6 in October from 56.1 in September, which is its fastest since June 2019. The index was at its exceptional best in August this year, when growth was at a tad faster pace at 56.7.

The observers credit the upturn to sharp expansions in business activity and new orders. In October, more action was seen on the capacity side, as businesses responded to rising backlogs by hiring more people at a faster rate. Companies also accumulated inputs to deliver to these backlogs, driving purchasing activity, which too was the fastest for over three years.

However, in spite of the increase in economic activity, the PMI survey said that respondents showed only a moderate degree of optimism for output over the next 12 months. Out of the companies surveyed, only 14% expected output to increase in the next year. The future output sub-index dipped slightly, while being slightly above the average since the onset of the COVID-19 pandemic.

The Tata Group-owned Air India on Thursday announced that it has signed agreements to acquire 100% shareholding in low-cost airline AirAsia India (AAI) and subsidiarize under Air India. The acquisition is expected to finish by the end of 2023.

An operational review process is in progress to integrate AAI with Air India’s low-cost service, Air India Express (AIXL) fully. AirAsia India can use the “AirAsia” brand name for 12 months. After the merger, the entity will be branded as Air India Express.

With this merger, Malaysia-based AirAsia Group will end its uncomfortable journey in India after eight years of launch. The airline has exited AirAsia India by selling its remaining 16.67 per cent stake to Air India for Rs 155.64 crore. Making losses since its first commercial flight on June 12, 2014, AirAsia India’s net loss increased by 42 per cent to Rs 2,178 crore in FY22. Till October, the service has been operating 1,267 flights per week connecting 19 Indian cities.

The Competition Commission of India (CCI) had on June 14 approved Air India’s request to acquire AirAsia India. The Indian airline aims to have 30 per cent share in both domestic and international markets, and plans to make significant investments to grow the fleet of AIXL after the merger.

Australia will officially ratify its interim trade deal with India, signed on April 2, in the forthcoming weeks, said Australia’s trade and tourism minister Don Farrell on Tuesday. The unusual delay in the ratification was due to the election of a new government in Australia.

In a virtual meeting with India’s Commerce and Industry Minister Piyush Goyal, Farrell said that in addition to the India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA), the amendments to Australia’s domestic regulation for resolving the issues related to the Double Taxation Avoidance Agreement (DTAA) have been introduced in the Australian Parliament. The DTAA is vital for India’s IT industry. It is likely that both the agreements will be ratified shortly after the joint standing committee on treaty submits its report to the Australian Parliament, he said.

The ECTA promises preferential access to all Indian goods in five years (from 96.4% immediately after the deal comes into effect) and 85% of Australian products (from 70% to begin with) to each other’s market. The deal will help Indian yoga instructors, chefs, students and STEM (Science, Technology, Engineering and Mathematics) graduates, who will have easier access to Australia, while premium wine from Australia will make greater inroads into Indian supermarkets once the deal is implemented.

Italy’s economy grew by 0.5% in the third quarter of 2022 from the previous quarter, said the preliminary data released by the Italian National Institute of Statistics (ISTAT). On a year-on-year basis, the gross domestic product (GDP) in the Euro Zone’s third largest economy has increased by 2.6%.

The recent quarterly increase is the seventh three-month period in a row that Italy’s economy has expanded. The Italian GDP has now exceeded expectations in each of the first three quarters of 2022. ISTAT said that assuming GDP to be flat quarter-on-quarter in the last quarter of the year, the annual growth would be 3.9% this year.

ISTAT said the third quarter witnessed an increase in domestic demand. It confirmed second quarter growth at 1.1% from the last three months, revising the year-on-year rate to 4.9% from the earlier reported 5%.

Not only analysts, but the Treasury in Rome expected to see a GDP contraction in the third quarter. The government’s Economic and Finance Document, in a statement released in September, estimated annual GDP growth this year to be at 3.3 per cent, hinting negative growth in this year’s last quarter.