Egypt’s External Debt Drops
Egypt’s external debt decreased to US$152.9 billion by the end of June, a significant reduction from US$160.6 billion at the end of March and US$168 billion at the close of December 2023, official data showed.
The country, which has a fiscal year running from July 1 to June 30, saw long-term external debt decrease to US$126.9 billion by the end of June, down from US$138.6 billion the previous year. Short-term debt also dropped to US$26.02 billion, compared to US$29.5 billion before, according to the Central Bank of Egypt.
The Egyptian government’s external debt decreased to US$80.2 billion from US$84.8 billion in December. The CBE’s own debt also saw a significant reduction, falling to US$34.67 billion from US$45.3 billion at the end of 2023. However, debt owed by Egyptian banks rose slightly to US$20.67 billion by the end of June, up from US$20.1 billion at the close of last year.
The overall decline in external debt highlights the Egyptian government’s ongoing efforts to manage its financial obligations amid a challenging global economic environment.
The country’s economic challenges, including inflation and fiscal deficits, have necessitated a careful balance between managing external obligations and sustaining growth.
The reduction in overall external debt is viewed as a positive signal to international markets and may bolster future creditworthiness, particularly as Egypt seeks international assistance and investment.
In a push to further boost the country’s economic growth, Prime Minister Mostafa Madbouly stated that the government is aiming to offer several airports and banks to the private sector soon.
In an official meeting on Oct. 14, Madbouly emphasized the government’s commitment to its privatization program, underlining that significant announcements will be made in the near future as part of the initiative, which is being implemented in cooperation with the International Finance Corp.
The meeting of the Coordinating Council for Monetary and Financial Policies, which included CBE Governor Hassan Abdalla, focused on strategies to stabilize the economy amid regional conflicts.
Abdalla highlighted the success of efforts to stabilize the exchange rate of the US dollar, supported by steady remittances from Egyptians abroad.
The council also reviewed initiatives aimed at encouraging further remittances, including the successful “Beit Al-Watan” program, which has contributed to a stable inflow of foreign currency into the banking system.
According to the report released by the Central Agency for Public Mobilization and Statistics in September, Egypt’s trade deficit decreased by 5.1 percent in June, reaching US$2.87 billion due to falling prices for wheat and other commodities. Imports fell by 3.3 percent to US$6 billion during the month.
The decline in imports was primarily driven by reduced prices for key commodities: wheat prices dropped by 21.5 percent, medicines and pharmaceutical preparations by 11.9 percent, plastics by 4.2 percent, and corn by 28.6 percent.
This follows a 10.3 percent decrease in trade deficit recorded in May, which was also attributed to lower import values.
In its fiscal year for 2023/24, Egypt achieved a primary budget surplus of 6.1 percent, bolstered by a landmark sale of coastal land to the UAE, said the country’s finance minister.
At a press conference in August, Ahmed Kouchouk disclosed that Egypt’s total expenditure amounted to 3.016 trillion Egyptian pounds (US$61.3 billion), with a budget deficit of 3.6 percent.
In February, the UAE, through a consortium led by Abu Dhabi’s sovereign wealth fund ADQ, signed an agreement to invest US$35 billion in Ras El-Hekma, a Mediterranean region 350 km. northwest of Cairo. This deal represents the largest foreign direct investment in Egypt’s history.
The minister highlighted that no new taxes were imposed last year, and tax revenues increased by 30 percent year on year for the financial year 2023/24.
This aligns with the International Monetary Fund’s objective for Egypt to boost tax revenue in its 2025/26 budget.
23/10/2024
IEA Sees Surplus Oil Supply, Weak China Demand in 2025
China's oil demand growth is expected to remain weak in 2025 despite recent stimulus measures from Beijing as the world's No. 2 economy electrifies its car fleet and grows at a slower pace, the head of the International Energy Agency said on Monday.
China, which has accounted for more than 60% of global oil demand growth in the last decade when its economy grew at 6.1% on average, is slowing down, IEA Executive Director Fatih Birol told Reuters on the sidelines of the Singapore International Energy Week conference.
"The Chinese economy at around 4% (growth) or so would mean China will need less and less energy," he said, adding that demand for electric vehicles, which have become cost-competitive against conventional cars, will continue to grow.
"The impact of the stimulus has not been as significant as some of the market observers have expected," Birol said, referring to Beijing's recent fiscal announcements aimed at reviving economic growth.
"It is still limited. And as we see today, it will be very difficult to see a major uptick of Chinese oil demand."
Global oil prices are hovering around US$70 a barrel after falling more than 7% last week despite rising geopolitical tensions in the Middle East.
"One of the two reasons why we saw muted reaction in oil prices is that demand is weak this year and the expectation that it will be weak next year," Birol said, noting that Chinese oil demand would have been flat this year if not for petrochemicals.
Another factor capping oil prices is the rise of supply from non-OPEC producers - the U.S., Canada, Brazil and Guyana - which is higher than global oil demand growth, he added.
When asked if he expects the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, to unwind production cuts in 2025, Birol said it is up to OPEC to decide on that.
"What I see is there will be a surplus next year of oil in the markets if there are no major changes in the geopolitical context," he said.
23/10/2024
Saudi Aramco CEO Calls for Transition Plan 2.0 with Focus on Asia, Global South
Saudi Aramco has called for a new energy transition strategy that addresses the needs of Asia and the Global South, amid concerns over the current plan’s uneven progress.
Speaking at the Singapore International Energy Week, Aramco President and CEO Amin H. Nasser emphasized the need for a “Transition Plan 2.0,” placing Asia at the forefront of global energy efforts.
“This may be Asia’s century. But Asia’s voice and priorities, like those of the broader Global South, are hard to see in current transition planning, and the whole world is feeling the consequences,” said Nasser.
He stressed that the current transition is "far slower, far less equitable, and far more complicated than many expected.”
Nasser proposed a more flexible approach to emissions reduction, one that is not bound by ideology. “This ideology-free approach simply prioritizes systematic emissions reduction where the impact is greater, at an acceptable cost, within reasonable timeframes, and whatever the source or technology,” he said.
He described the plan as “multi-source, multi-speed, and multi-dimensional,” aiming to meet the security, affordability, and sustainability needs of all countries.
Addressing the financial challenges of the energy transition, Nasser pointed out the staggering cost estimates. “Transition will be expensive for everyone, with estimates of between US$100 and US$200 trillion required globally by 2050.”
For developing countries, he noted, almost US$6 trillion may be required each year. Aramco's CEO also highlighted the disparity in capital costs, stating that “the cost of capital is more than twice as high in developing countries where the need is greater.”
Nasser also addressed the future of oil demand, dismissing predictions of a steep decline. “Even when the growth in global oil demand stops at some point, no abrupt drop is anticipated. More than 100 million barrels per day would realistically still be required by 2050,” he said, countering claims that oil demand could fall to just 25 million barrels per day by then.
A shortfall of 75 million barrels, he warned, would be “devastating” for global energy security and affordability.
Despite significant investments in the global energy transition, Nasser pointed out that oil demand is at an “all-time high,” while gas demand has surged nearly 70 percent since 2000.
“So, rather than an energy transition, we are really talking about energy addition, where just the growth is mostly met by alternatives, instead of replacing conventional energy in any meaningful way,” he said.
Nasser criticized the current transition strategy for failing to deliver on its promises. “One, energy that is affordable — electricity prices in Europe rose as much as three to five-fold in many countries over the past two decades, despite the shift to renewables,” he explained.
Aramco's CEO also noted that progress in renewable energy remains sluggish, with wind and solar supplying less than 4 percent of the world’s energy.
“As energy consumers around the world are served an increasingly unrealistic and expensive transition, the less they like the taste. They hunger for something that connects their passion for the net-zero future we all want, with a reality we can all afford, and a relentless focus on what works,” he concluded.
23/10/2024
Dubai's RTA Completes All Phases of Al Khail Road Project
Roads and Transport Authority (RTA) has announced that it has completed all phases of Al Khail Road Development Project in Dubai. This includes the construction of five bridges spanning 3,300m and road widening work of over 6,820 m.
These improvements are spread across seven locations along Al Khail Road, namely Al Jaddaf, Business Bay, Zabeel, Meydan, Al Quoz 1, Ghadeer Al Tair, and Jumeirah Village Circle, said RTA in a statement.
The project serves 1.5 million people and contributes to a 30% reduction in travel time while increasing the capacity of existing intersections and bridges to accommodate around 19,600 vehicles per hour. It also enhances traffic flow on Al Khail Road, resolves traffic overlapping at interchanges, and ensures free-flowing traffic, it stated
RTA said it had adopted a new approach to accelerate construction, reducing the construction period from 18 months to 9 months, 50% reduction, by awarding contracts to multiple companies.
As a result, the daily workforce of 5,000 engineers and laborer was deployed, logging six million work hours, and using 650 machines and equipment daily, it added.
Al Khail Road Development Project is one of the key strategic projects aimed at upgrading parallel and supporting road corridors to Sheikh Zayed Road, Sheikh Mohammed bin Zayed Road, and Emirates Road.
It is also one of the primary arterial roads in Dubai, starting from the Business Bay Crossing and ending at its intersection with Sheikh Mohammed bin Zayed Road. The road consists of five lanes in each direction, expanding to more than six lanes in some areas.
The project included the construction of five bridges and the development and widening of roads in seven locations. These are:
*Zabeel: A 700-metre bridge was constructed, between Oud Metha Street and Financial Centre Street intersections, connecting traffic from Zabeel Palace Street and Oud Metha Street to Al Khail Road towards Jebel Ali. The bridge consists of three lanes with an estimated capacity of 4,800 vehicles per hour.
*Meydan: A 610-metre bridge with two lanes was built, between Al Meydan Road and Ras Al Khor Road intersections, connecting traffic from Meydan Street to Al Khail Road towards Deira, with a capacity of 3,200 vehicles per hour. Additionally, improvements were made to 1,550 meters of surface roads to link traffic from Al Khail Road towards Ras Al Khor Street.
*Al Quoz 1: A 650-metre bridge with two lanes was constructed, between the intersections of Al Meydan Road and Al Waha Street, connecting traffic from Meydan Street to Al Khail Road towards Jebel Ali, with a capacity of 3,200 vehicles per hour.
Works also included 2,170m of surface road improvements to connect traffic from Al Khail Road to Al Waha Street and Latifa Bint Hamdan Street.
Ghadeer Al Tair: A 640-metre bridge with two lanes was constructed, between the intersections of Al Meydan Road and Latifa bint Hamdan Street, connecting traffic from Latifa Bint Hamdan Street to Al Khail Road towards Deira, with a capacity of 3,200 vehicles per hour. Surface road improvements spanning 1,350 meters were also carried out to link traffic from Al Khail Road to Meydan Street.
Jumeirah Village Circle: A 700-metre bridge with two lanes was constructed, between Hessa Street and Al Khamila Street, connecting traffic from Al Khail Road to Hessa Street, with a capacity of 3,200 vehicles per hour. Surface road improvements over 900 meters were carried out to connect traffic from Jumeirah Village Circle to Al Khail Road towards Deira.
Al Jaddaf: Surface expansion works were conducted on Al Khail Road in Al Jaddaf by adding a new lane over 600 meters to improve traffic flow towards Deira, increasing the road's capacity between the intersections of Oud Metha Street and Financial Centre Street by approximately 2,000 vehicles per hour.
Business Bay: A surface widening of Al Khail Road at the entrance to Business Bay by adding an extra 435-metre lane to ensure smoother flow to Business Bay area from Al Khail Road and step up the traffic safety of that sector of the road in the direction of Jebel Ali.
23/10/2024
US Can Prosecute Turkish Bank in Iran Sanctions Case, US Appeals Court Rules
A U.S. appeals court on Tuesday said the federal government may prosecute Turkey's Halkbank on charges it helped Iran evade American sanctions, rejecting the state-owned lender's argument that it deserved immunity.
In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals found no basis under centuries-old common law principles for foreign state-owned companies to be absolutely immune from U.S. prosecution related to commercial, nongovernmental activities.
Circuit Judge Joseph Bianco said the Manhattan-based appeals court should defer to the executive branch's determination that the U.S. Department of Justice could prosecute Halkbank. "Although certain prior cases extended immunity to state-owned corporations based on their governmental conduct, the common law places no independent bar on the prosecution of such corporations for their commercial activity," he wrote.
He also wrote that a decision to prosecute foreign state-owned companies such as Halkbank, rather than impose tariffs or deny military aid to their state sponsors, "is not one for the judiciary to second guess." In response, Halkbank said in a statement to the Istanbul stock exchange: "Our Bank will use all its legal rights to appeal with regard to the October 22, 2024 decision of the Second Circuit, particularly with the U.S. Supreme Court."
A spokesman for U.S. Attorney Damian Williams in Manhattan declined to comment on the court's decision. The appeals court panel was considering the case for the second time, following a related April 2023 decision by the U.S. Supreme Court.
U.S. prosecutors charged Halkbank in 2019 over its alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions. Prosecutors said Halkbank helped Iran secretly transfer US$20 billion of restricted funds, converted oil revenue into gold and cash to benefit Iranian interests, and documented fake food shipments to justify transfers of oil proceeds.
Halkbank pleaded not guilty to bank fraud, money laundering and conspiracy. The case became a thorn in U.S.-Turkey relations, with Turkish President Tayyip Erdogan calling the U.S. charges an "unlawful, ugly" step.
'UNPRECEDENTED'
In 2021, the appeals court had concluded Halkbank could be prosecuted under the federal Foreign Sovereign Immunities Act of 1976 because its alleged misconduct involved commercial activity not covered by that law. The Supreme Court later agreed that Congress' desire to shield foreign countries and their instrumentalities from civil liability did not cover criminal cases. But in a 7-2 decision, the high court said the 2nd Circuit should more fully review whether common law immunity shielded Halkbank.
The bank's arguments included that the case concerned "diplomatic activity" because it included a charge based on Halkbank's alleged misrepresentations to U.S. Treasury officials about its sanctions compliance. During oral arguments on Feb. 28, Justice Department lawyer Michael Lockard said that was no reason to excuse Halkbank.
"For a foreign commercial bank, one that is majority owned by the state of Turkey, to launder billions and billions of dollars (to benefit Iran), to deceive banks, to lie to U.S. Treasury officials, that conduct is unprecedented," he said.
The appeals court returned the case to U.S. District Judge Richard Berman in Manhattan. He ruled on different grounds in 2020 that Halkbank did not deserve immunity. The case is U.S. v. Halkbank, 2nd U.S. Circuit Court of Appeals, No. 20-03499. - Reuters
23/10/2024
Russia, Iran Almost Shift to National Currencies: Kremlin
Iran and Russia have been using national currencies in more than 96% of their mutual payments, the Kremlin’s press service said on the verge of the meeting between presidents of the two countries to be held on the sidelines of the BRICS Summit in Kazan.
"The leadership of both countries pay priority attention to the development of trade and economic ties. Growth of mutual trade in 2023, despite a certain decline, totaled over US$4.0 billion. We record growth of 12.4% as of the end of January - August. The share of national currencies in mutual payments is over 96%," the press service informed.
Russia and Iran are implementing several large-scale mutual projects in the sphere of transport and energy, the Kremlin said. The North-South international transport corridor project is being developed. Russian-Iranian relations are on the rise, the press service noted.
According to the Islamic Republic of Iran Customs Administration (IRICA), the value of Iran’s non-oil exports to Russia rose 12% in the first six months of the current Iranian calendar year (March 20-September 21) compared to last year’s first half.
According to the IRICA data, Iran exported 1.3 million tons of commodities worth over US$494 million to Russia in the first half of the current Iranian year.
Non-oil exports to the Russian Federation also increased by 20% in terms of weight.
In the first half of the current Iranian year, foreign transit through Iran from Russia reached 526,000 tons with a growth of 17%, and foreign transit to Russia was 56,000 tons, which decreased by 18%.
The Islamic Republic had exported 2.2 million tons of commodities worth US$965 million to Russia in the previous Iranian calendar year (ended on March 20), which also registered a 54% increase in weight and a 28% rise in value.
The main Iranian products exported to Russia in the previous year were fresh or dried pistachios, ordinary non-expandable polystyrene, fresh kiwi and synthetic fibers, and other types of polyester.
Iran and Russia have been taking serious steps to boost their mutual trade over the past few years.
In late January, Iran’s late President Ebrahim Raisi said that the Islamic Republic and Russia have reached an agreement to boost the trade between the two countries up to US$10 billion.
“We agreed to remove trade barriers and boost the economic exchanges between the two countries. Currently, the level of mutual trade is not acceptable, so the two countries agreed to increase trade to US$10 billion a year,” Raisi said on January 21, upon arrival to Tehran after a two-day visit to Moscow.
He also noted that the two sides also discussed monetary and banking issues during his talks with Russian officials.
The two countries also agreed to identify mutual agricultural capacities as well as suitable areas for the exchange of agricultural products in order to increase the level of trade in the agricultural sector, according to the official.
He went on to say that the Islamic Republic of Iran has very good capacities in the field of transit and transportation, saying: “During this visit, it was agreed to activate the north-south corridor. This transit route will make the time and distance of transiting goods from Russia and different northern countries to the southern regions much shorter.” - Tehran Times
23/10/2024
Tehran, Riyadh Eye Further Air Transport Cooperation
The head of the Civil Aviation Organization of Iran (CAO) and the Saudi Ambassador to the Islamic Republic of Iran discussed expanding air transport cooperation between the two countries.
Hossein Pourfarzaneh met and held talks with Abdullah bin Saud Al-Anzi on Tuesday, IRNA reported.
In this meeting, the two sides discussed expanding air transport cooperation to facilitate the movement of passengers and tourists, as well as commercial flights.
In late September, Iranian Oil Minister Mohsen Paknejad has expressed hope that the Joint Economic Committee meeting of Iran and Saudi Arabia will be held in the near future.
Speaking at a celebration held on the occasion of the Saudi National Day, Paknejad said: “As the head of the joint economic committee of the two countries, I am very pleased to congratulate National Day to the government and the dear people of Saudi Arabia on behalf of the government of the Islamic Republic of Iran.”
“The 14th government, headed by Masoud Pezeshkian, pays special attention to the development of relations with Saudi Arabia, and believes that the cooperation between Iran and Saudi Arabia as two important countries in the Persian Gulf region and West Asia, can bring stability and security to the countries in the region, and ensure the development and improvement of the welfare of the people of these countries,” he stressed. - Tehran Times
23/10/2024
Iran Oil Minister Departs for BRICS Summit
Iranian Minister of Petroleum Mohsen Paknejad left Tehran for Kazan, Russia, to accompany the President on his trip to attend the 16th BRICS Summit.
Meanwhile, before departing for Russia, Iranian President Masoud Pezeshkian pointed to the importance of the meeting, stating that BRICS consists of countries aiming to promote multilateralism globally to counteract U.S. unilateralism and facilitate free trade for all.
He identified agriculture, energy, industry, trade, and tourism as potential areas for cooperation among BRICS member countries, adding the trip provides an opportunity to meet with the presidents of Russia, China, India, and several other countries attending the summit to discuss and explore further cooperation.
The President emphasized that synergy and the development of communications among BRICS countries are effective steps towards overcoming the challenges of unilateralism and U.S. sanctions, noting that this is the first time Iran has participated as a main member of the group, which doubles the importance of this trip. - Shana
23/10/2024
Jeddah Hosting Key Meetings Aimed at Improving Aviation Sector
Saudi Arabia is hosting two important international aviation meetings to improve air traffic management, further establishing its role in the global air travel sector.
Starting on Oct. 20, the Saudi Air Navigation Services Co. is conducting the 13th meeting of the International Civil Aviation Organization Middle East Communications, Navigation, and Surveillance Sub-Group, alongside the 10th meeting of ICAO’s Air Traffic Management Working Group in Jeddah.
This is the first time both meetings are held simultaneously, with sessions running until Oct. 23, the Saudi Press Agency reported.
The Kingdom has approved a strategy to develop its civil aviation industry and create a favorable investment environment. The initiative seeks to position Saudi Arabia as a leading player in the Middle East aviation sector, enhance its contribution to the gross domestic product, and support the goals of Vision 2030.
The strategy focuses on transforming the Kingdom into a logistical hub connecting three continents and facilitating air transport and freight.
Around 80 participants from 18 countries attended the meetings, including representatives from the International Air Transport Association, ICAO, and PCCW Global, with oversight from Saudi Arabia’s General Authority of Civil Aviation.
The inaugural meeting of the Flight and Flow Information for a Collaborative Environment working group is taking place under the Secretariat General of the GCC, to discuss developments and practical solutions in the aviation sector.
The meetings also coincide with International Air Traffic Controllers Day, which recognizes the crucial role of air traffic controllers in maintaining safe airspace.
23/10/2024
Multilateral Action Needed to Promote Sustainable Economic Growth: Saudi Finance Minister
Multilateral action should be adopted to address current risks and promote future sustainable economic growth and human development, a top Saudi official reiterated.
While attending Macro Week at the Peterson Institute for International Economics on Oct. 21 in Washington, D.C., alongside the 2024 International Monetary Fund and World Bank Group Annual Meetings, Saudi Minister of Finance and Chair of the International Monetary and Financial Committee Mohammed Al-Jadaan highlighted that low-income nations are the most affected by challenges facing the global community.
During his speech, Al-Jadaan also underlined that it is essential that global financial institutions continue to adjust quickly and decisively to solve challenges such as poverty and inequality, according to a statement.
This commitment falls in line with the Kingdom’s Vision 2030 goal of a “Thriving Economy,” which stipulates generating diversified opportunities and attracting global talents and expertise to contribute to Saudi Arabia’s economic development.
It also aligns well with the Sustainable Development Goal of promoting inclusive and long-lasting economic growth and achieving full and productive employment, decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value by 2030.
“MDBs (Multilateral Development Banks) need to increase their focus on capacity-building, as well as provide the support and advice needed,” Al-Jadaan said during his speech.
“Today, I participated in the PIIE Macro Week on the sidelines of the 2024 Annual Meetings of the IMF and the World Bank, during which I stressed the importance of strengthening multilateral action to achieve sustainable economic growth.,” the minister said in a statement on X.
The SDGs cover several aspects, including strengthening the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all.
It also entails protecting labor rights and promoting safe and secure environments accessible to everyone, including migrant workers – mainly females – and those in precarious employment.
PIIE is recognized as a prominent global research institution that offers policy analysis and pragmatic approaches to bolster the resilience of the global economy.
The organization strives to enhance global economic stability through actionable solutions by engaging top-tier experts in the field.
PIIE Macro Week aims to assemble finance ministers, central bankers, governmental authorities, and industry influencers worldwide for deliberations on macroeconomic matters. This event also seeks to identify strategies to fortify global economic steadiness and advancement.
23/10/2024