Knock-on effects of inflation, the energy crisis and the geopolitical situation have intensified global economic headwinds but economies in the GCC and the wider Middle East are expected to fend off challenges as policymakers closely watch the evolving situation.
Although uncertainty has risen in recent times, with an unprecedented jump in energy and commodity prices and increases in interest rates globally, the economic momentum driven by careful policy implementation over the past two years in the region is expected to continue in 2023, ministers and business leaders said on Thursday at the World Economic Forum in Davos.
“We were quite cognisant of the challenges that the world is facing but we're also looking closely at these evolving challenges and how they're moving,” said Faisal Alibrahim, Saudi Arabia’s Minister of Economy and Planning.
There will continue to be interest rate increases, however, with China emerging out of Covid lockdown.
“There is an opportunity for what people perceive to be a global recession to only be a slowdown, except for a few areas”, the minister said.
“And for it to probably bottom out towards the second half of the year at the worst.”
In October, the International Monetary Fund cut its global economic growth forecast to 2.7 per cent for 2023, 0.2 percentage points lower than its July forecast.
It also warned of a 25 per cent probability that output could fall below 2 per cent in 2023, the weakest growth since 2001 except for the 2008 global financial crisis and the acute phase of the Covid-19 pandemic.
The fund's managing director Kristalina Georgieva on Wednesday said that 2023 will be a difficult year, with “unthinkable events” including the pandemic as well as the war in Ukraine and its impact on energy and food prices.
She said Saudi Arabia, Opec’s biggest crude producer and Arab world’s largest economy, has turned out to be a bright spot at a difficult time for the world economy and the kingdom needs to maintain its high growth rate in 2023.
The IMF estimates the kingdom's economy grew 7.6 per cent in 2022 after 3.2 per cent growth in 2021. Jadwa Investment projected an economic expansion of 8.7 per cent last year, while the Organisation for Economic Co-operation and Development estimated gross domestic product growth of as much as 9.9 per cent.
Saudi Finance Minister Mohammed Al Jadaan in December said the kingdom's GDP is forecast to have grown 8.5 per cent last year, with average inflation at about 2.6 per cent.
“Saudi Arabia is becoming the global growth story, but if you double-click on that 8.5 per cent [growth rate], you will see that our non-oil activities in the private sector, essentially, have grown at a very high rate, up to the end of the third quarter on a cumulative basis,” Mr Alibrahim said on Thursday.
The kingdom, which was the fastest growing G20 economy last year, plans to continue to enact its Vision 2030 economic reform agenda that has already borne fruit.
It also plans to continue evolving “new sectors” including tourism, sports and entertainment to boost the private sector’s contribution to GDP to achieve 3.1 per cent or more economic growth this year, he added.
Egypt, the most populous Arab country, also expects to hit its 5 per cent GDP growth target this year, despite “unprecedented" economic turbulence this year, Hala Younes, Egypt’s Minister of Planning and Economic Development, told delegates.
“We are all living in unprecedented times. Very, very challenging times,” she said.
However, Egypt has a resilient economy and despite challenges, it maintained 3.6 per cent growth during the pandemic, one of the very few countries to achieve that feat.
"Even last year, we achieved 6.6 per cent economic growth,” she said.
The minister said consumer inflation — which rose sharply in December to 21.3 per cent, its highest level in five years, and piled pressure on the government — will start to come down this year as costs of essential commodities such as wheat start to come down in the international market.
Egypt, which is one of the biggest wheat importers in the world, also devalued its currency three times in 10 months, but the minister said the situation will improve as the tourism sector bounces back and foreign direct investment levels improve.
FDI in December last year almost doubled to $9 billion, up from $5 billion in the previous year, she said.
“We are taking the corrective measures … in order to attract FDI and stabilise the market.”
Bahrain, the smallest GCC economy, achieved about 7 per cent year-on-year non-oil economic growth in the third quarter of last year and the kingdom expects to hit its 5 per cent overall 2022 target of non-oil economic growth when final data are released, Bahrain’s Minister of Sustainable Development Noor Alkhulaif said.
The kingdom, which still relies about 70 per cent on oil proceeds, plans to diversify and widen its revenue base.
The country, which increased VAT from 5 per cent in 2019 to 10 per cent in 2022, is mulling other options including imposing a corporate tax, she said.
There is no timeline as to when the kingdom may make a decision on levying a new corporate tax, however it has no plans to introduce a personal income tax, she added.
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
AndhaDhun
Director: Sriram Raghavan
Producer: Matchbox Pictures, Viacom18
Cast: Ayushmann Khurrana, Tabu, Radhika Apte, Anil Dhawan
Rating: 3.5/5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
Facebook | Our website | Instagram
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Brief scoreline:
Liverpool 5
Keita 1', Mane 23', 66', Salah 45' 1, 83'
Huddersfield 0
Central%20Bank's%20push%20for%20a%20robust%20financial%20infrastructure
%3Cul%3E%0A%3Cli%3ECBDC%20real-value%20pilot%20held%20with%20three%20partner%20institutions%26nbsp%3B%3C%2Fli%3E%0A%3Cli%3EPreparing%20buy%20now%2C%20pay%20later%20regulations%26nbsp%3B%3C%2Fli%3E%0A%3Cli%3EPreparing%20for%20the%202023%20launch%20of%20the%20domestic%20card%20initiative%26nbsp%3B%3C%2Fli%3E%0A%3Cli%3EPhase%20one%20of%20the%20Financial%20Infrastructure%20Transformation%20(FiT)%20completed%3C%2Fli%3E%0A%3C%2Ful%3E%0A
MATCH DETAILS
Juventus 2 (Bonucci 36, Ronaldo 90 6)
Genoa 1 (Kouame 40)
The%20US%20Congress%2C%20explained
%3Cp%3E-%20US%20Congress%20is%20divided%20into%20two%20chambers%3A%20the%20House%20of%20Representatives%20and%20Senate%3C%2Fp%3E%0A%3Cp%3E-%20435%20members%20make%20up%20the%20House%2C%20and%20100%20in%20the%20Senate%3C%2Fp%3E%0A%3Cp%3E-%20A%20party%20needs%20control%20of%20218%20seats%20to%20have%20a%20majority%20in%20the%20House%3C%2Fp%3E%0A%3Cp%3E-%20In%20the%20Senate%2C%20a%20party%20needs%20to%20hold%2051%20seats%20for%20control%3C%2Fp%3E%0A%3Cp%3E-%20In%20the%20event%20of%20a%2050-50%20split%2C%20the%20vice%20president's%20party%20retains%20power%20in%20the%20Senate%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
In numbers
1,000 tonnes of waste collected daily:
- 800 tonnes converted into alternative fuel
- 150 tonnes to landfill
- 50 tonnes sold as scrap metal
800 tonnes of RDF replaces 500 tonnes of coal
Two conveyor lines treat more than 350,000 tonnes of waste per year
25 staff on site
Baby Driver
Director: Edgar Wright
Starring: Ansel Elgort, Kevin Spacey, Jamie Foxx, Lily James
Three and a half stars
Friday's schedule in Madrid
Men's quarter-finals
Novak Djokivic (1) v Marin Cilic (9) from 2pm UAE time
Roger Federer (4) v Dominic Thiem (5) from 7pm
Stefanos Tsitsipas (8) v Alexander Zverev (3) from 9.30pm
Stan Wawrinka v Rafael Nadal (2) from 11.30pm
Women's semi-finals
Belinda Bencic v Simona Halep (3) from 4.30pm
Sloane Stephens (8) v Kiki Bertens (7) from 10pm
The biog
Marital status: Separated with two young daughters
Education: Master's degree from American Univeristy of Cairo
Favourite book: That Is How They Defeat Despair by Salwa Aladian
Favourite Motto: Their happiness is your happiness
Goal: For Nefsy to become his legacy long after he is gon
Sri Lanka's T20I squad
Thisara Perera (captain), Dilshan Munaweera, Danushka Gunathilaka, Sadeera Samarawickrama, Ashan Priyanjan, Mahela Udawatte, Dasun Shanaka, Sachith Pathirana, Vikum Sanjaya, Lahiru Gamage, Seekkuge Prasanna, Vishwa Fernando, Isuru Udana, Jeffrey Vandersay and Chathuranga de Silva.
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
ON%20TRACK
%3Cp%3EThe%20Dubai%20Metaverse%20Assembly%20will%20host%20three%20main%20tracks%3A%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EEducate%3A%3C%2Fstrong%3E%20Consists%20of%20more%20than%2010%20in-depth%20sessions%20on%20the%20metaverse%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInspire%3A%3C%2Fstrong%3E%20Will%20showcase%20use%20cases%20of%20the%20metaverse%20in%20tourism%2C%20logistics%2C%20retail%2C%20education%20and%20health%20care%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EContribute%3A%3C%2Fstrong%3E%20Workshops%20for%20metaverse%20foresight%20and%20use-case%20reviews%3C%2Fp%3E%0A
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
UAE currency: the story behind the money in your pockets
SQUADS
Bangladesh (from): Shadman Islam, Mominul Haque, Soumya Sarkar, Shakib Al Hasan (capt), Mahmudullah Riyad, Mohammad Mithun, Mushfiqur Rahim, Liton Das, Taijul Islam, Mosaddek Hossain, Nayeem Hasan, Mehedi Hasan, Taskin Ahmed, Ebadat Hossain, Abu Jayed
Afghanistan (from): Rashid Khan (capt), Ihsanullah Janat, Javid Ahmadi, Ibrahim Zadran, Rahmat Shah, Hashmatullah Shahidi, Asghar Afghan, Ikram Alikhil, Mohammad Nabi, Qais Ahmad, Sayed Ahmad Shirzad, Yamin Ahmadzai, Zahir Khan Pakteen, Afsar Zazai, Shapoor Zadran