The economy of the United Arab Emirates (UAE) is expected to grow about 3.5 percent in 2016 as the country moves forward with strategic projects despite the global drop in oil prices, Economy Minister Sultan bin Saeed al-Mansouri said.
The International Monetary Fund has forecast real GDP growth of 3.1 percent in 2016. Mansouri said that the decline in oil prices has had a limited impact on the UAE’s economy due to the non-oil sector’s large contribution to gross domestic product (GDP). “I do not expect a deficit in the [federal] budget even if oil prices continue to fall,” Mansouri said. He said the federal government and individual emirates are moving ahead with strategic projects announced in 2014 and 2015. “Housing programs for UAE nationals and infrastructure projects . . . will not be affected by any developments in world oil markets because they are being carried out under pre-allocated budgets,” he said. Mansouri also said that the UAE is in the final stages of drafting a foreign investment law that will allow up to 100 percent foreign ownership of businesses in some sectors, and that he expects the law to be issued “soon.” [Zawya, 2/3/2016]
Business activity in Egypt shrank for the fourth straight month in January, the Emirates NBD Purchasing Managers’ Index (PMI) for Egypt showed, as new export orders tumbled and output declined. PMI for the non-oil private sector slipped to 48 points in January from 48.2 points in December, remaining below the 50-point mark that separates growth from contraction. “January’s survey represents a marginal slowdown from December, with the export sector appearing to be the main source of weakness,” Senior Economist at Emirates NBD Jean-Paul Pigat said. “We expect economic activity to accelerate in the coming months, with our forecast for real GDP growth in FY2015/16 sitting at 3.9 percent,” he added. [Reuters, 2/3/2016]
The inflation rate in Turkey rose by 1.82 percent in January, triggered by persistently high food costs and tax hikes, raising the annual inflation rate to 9.58 percent from 8.81 percent, the highest since May 2014 and almost double the Central Bank’s official target. Finance Minister Naci Ağbal said rising prices of tobacco, alcoholic drinks, and food, as well as the recent increase in the minimum wage, pushed up the inflation rate. “We hope to decrease the inflation rate in 2016 through a number of measures,” he said. Central Bank Governor Erdem Başçı said on January 26 that inflation will not slow to the bank’s 5 percent target until 2018 and that policy makers are focused on trying to keep the rate under 10 percent. [Hurriyet, Bloomberg, 2/3/2016]
State oil giant Saudi Aramco is expected to maintain the same number of oil and gas drilling rigs this year despite weak oil prices, industry sources said. Saudi Aramco has asked oilfield service companies and suppliers again this year for discounts due to a slump in global oil prices. Aramco managed to make big savings last year on drilling costs, the sources say. “It is a normal situation in drilling activity,” said one source. Saudi Aramco is currently operating around 212 oil and gas rigs. “They want to maintain activity but reduce costs, there might be some movements by replacing offshore rigs to land or oil to gas,” a second source said. Last year, industry sources said Aramco might raise its number of oil and gas drilling rigs in 2016 depending on oil prices. [Reuters, 2/3/2016]
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Minister says UAE GDP growth seen at 3.5 percent in 2016
The economy of the United Arab Emirates (UAE) is expected to grow about 3.5 percent in 2016 as the country moves forward with strategic projects despite the global drop in oil prices, Economy Minister Sultan bin Saeed al-Mansouri said. The International Monetary Fund has forecast real GDP growth of 3.1 percent in 2016. Mansouri said that the decline in oil prices has had a limited impact on the UAE’s economy due to the non-oil sector’s large contribution to gross domestic product (GDP). “I do not expect a deficit in the [federal] budget even if oil prices continue to fall,” Mansouri said. He said the federal government and individual emirates are moving ahead with strategic projects announced in 2014 and 2015. “Housing programs for UAE nationals and infrastructure projects . . . will not be affected by any developments in world oil markets because they are being carried out under pre-allocated budgets,” he said. Mansouri also said that the UAE is in the final stages of drafting a foreign investment law that will allow up to 100 percent foreign ownership of businesses in some sectors, and that he expects the law to be issued “soon.” [Zawya, 2/3/2016]
Egypt’s non-oil business activity slows for fourth straight month in January
Business activity in Egypt shrank for the fourth straight month in January, the Emirates NBD Purchasing Managers’ Index (PMI) for Egypt showed, as new export orders tumbled and output declined. PMI for the non-oil private sector slipped to 48 points in January from 48.2 points in December, remaining below the 50-point mark that separates growth from contraction. “January’s survey represents a marginal slowdown from December, with the export sector appearing to be the main source of weakness,” Senior Economist at Emirates NBD Jean-Paul Pigat said. “We expect economic activity to accelerate in the coming months, with our forecast for real GDP growth in FY2015/16 sitting at 3.9 percent,” he added. [Reuters, 2/3/2016]
Annual inflation nears double digits in Turkey amid hikes in taxes, food prices
The inflation rate in Turkey rose by 1.82 percent in January, triggered by persistently high food costs and tax hikes, raising the annual inflation rate to 9.58 percent from 8.81 percent, the highest since May 2014 and almost double the Central Bank’s official target. Finance Minister Naci Ağbal said rising prices of tobacco, alcoholic drinks, and food, as well as the recent increase in the minimum wage, pushed up the inflation rate. “We hope to decrease the inflation rate in 2016 through a number of measures,” he said. Central Bank Governor Erdem Başçı said on January 26 that inflation will not slow to the bank’s 5 percent target until 2018 and that policy makers are focused on trying to keep the rate under 10 percent. [Hurriyet, Bloomberg, 2/3/2016]
Saudi Aramco to keep same number of oil, gas rigs in 2016
State oil giant Saudi Aramco is expected to maintain the same number of oil and gas drilling rigs this year despite weak oil prices, industry sources said. Saudi Aramco has asked oilfield service companies and suppliers again this year for discounts due to a slump in global oil prices. Aramco managed to make big savings last year on drilling costs, the sources say. “It is a normal situation in drilling activity,” said one source. Saudi Aramco is currently operating around 212 oil and gas rigs. “They want to maintain activity but reduce costs, there might be some movements by replacing offshore rigs to land or oil to gas,” a second source said. Last year, industry sources said Aramco might raise its number of oil and gas drilling rigs in 2016 depending on oil prices. [Reuters, 2/3/2016]
Also of interest
UAE’s non-oil business activity slows | Gulf News
Saudi non-oil economy expansions slows to record | Bloomberg
Egypt’s agriculture ministry to accept wheat with 0.05 percent ergot | Reuters
Moody’s says Saudi Arabia, China aid is credit positive for Egypt | Ahram Online
Tunisia, World Bank focus on economic reforms, investment in interior | TAP
Libya’s NOC says oil production at 370,000 bpd | Libya Monitor (subscription)
Algerian court jails six in oil firm corruption case | Reuters
Turkey hits all-time gas consuming record | Hurriyet
Sliding lira increases the pain for Turkey’s central bank | FT
Arbitration court ruling heralds new Turkish-Iranian gas cooperation | Reuters
Turkish businesses see opportunity, and competition, as Iran opens up | Reuters