What is Saudi Arabia’s expected non-oil growth in the medium term?

Saudi Arabia projects that its non-oil growth will surpass 5% in the medium term, as outlined by Finance Minister Mohammed Al Jadaan. This anticipated growth is based on current trends where the non-oil GDP has been expanding at rates around and above 4%.

Saudi Arabia’s Non-Oil Sector Outlook

Saudi Arabia’s non-oil sector is projected to experience a growth rate exceeding 5% in the coming years. Finance Minister Mohammed Al Jadaan underscored this at the Saudi Capital Markets Forum, emphasizing that non-oil GDP is already advancing at numbers above 4%.

Read: Gulf Markets Edge Higher in Anticipation of US Inflation Data

Diversification Efforts Bearing Fruit

The kingdom’s economy is showing signs of increased diversification, with the non-oil growth figures serving as a testament to the success of these efforts. While the shift away from oil reliance is promising, challenges remain, including the necessity for constant diversification and adaptation to global economic trends. However, market statistics and government initiatives—like the Saudi Vision 2030—support a sustained positive forecast for the Saudi economy.

Expert Perspectives on Economic Growth

Financial and economic experts echo Al Jadaan’s positive sentiment, pointing to Saudi Arabia’s strategic reforms and private sector expansion as critical components of the non-oil growth. Their insights further substantiate the kingdom’s approach to shaping a resilient and diversified economy.

Impacts and Expectations for the Future

The projected growth has meaningful implications for businesses and residents of Saudi Arabia. It promises more job opportunities, increased foreign investment, and a vibrant consumer market. When juxtaposed with other GCC countries, Saudi Arabia’s economic performance can be seen not only as a national success but also as a regional milestone.

Sustaining Momentum

Looking ahead, Saudi Arabia is expected to continue investing in non-oil sectors such as renewable energy and digital infrastructure, essential for maintaining the growth momentum. While the country’s economic forecast is positive, it remains subject to global economic conditions, oil market dynamics, and regional political shifts.

Story Snapshots:

• Saudi Aramco initiates trading of the US WTI Midland crude oil grade.
• The transactions took place in the Platts Market on Close process.
• These trades represent Aramco’s first foray into WTI in the Platts window.
• Aramco’s expansion into trading activities includes a recent purchase of North Sea crude DUC.

What recent trading move has Saudi Aramco made, and what does it signify for the oil market? Saudi Aramco has begun trading the US crude oil grade WTI Midland, which factors into the Brent benchmark, marking Aramco’s deepening engagement in global oil trading and signaling confidence in the benchmark’s changes.

In a notable shift, Saudi Aramco, the state oil behemoth of Saudi Arabia, has ventured into trading a US crude oil grade that plays a pivotal role in setting the Brent benchmark. This move underscores the company’s expanding trading operations and the growing complexity of the global oil market.

On Monday, Aramco sold a cargo of WTI Midland crude to the energy giant Total through the Platts Market on Close trading process, commonly referred to as the Platts window. This transaction, following an earlier sale last Thursday, marks Aramco’s debut in WTI trades within this influential pricing window.

Joel Hanley, the S&P global director of crude and fuel oil markets, confirmed these initial trades by Aramco, highlighting the company’s growing presence in the global trading sphere. Aramco’s move to execute these trades through the Platts window aligns with its broader strategy of scaling up its trading activities, as seen in its December purchase of North Sea crude DUC.

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The involvement of more players in the Platts window, following the inclusion of WTI in the Brent benchmark last year, signifies a shift towards a more diversified and representative oil pricing system. Veterans in the field, like Adi Imsirovic, believe Aramco’s participation not only attests to the reliability of the new benchmark but also reflects the Saudi government’s commitment to adapt to the energy transition in a sustainable manner.

Saudi Arabia’s recent adjustments to its oil capacity expansion plans further reiterate the country’s strategic pivot in response to the global energy transition. The inclusion of US WTI Midland, among five other crudes, including North Sea grades, contributes additional supply, thereby reducing volatility in Brent crude spreads—resulting in more stable pricing, especially during the crucial period when futures contracts expire.

Aramco’s latest trading decisions are more than mere business maneuvers. They are indicative of a broader, strategic approach to energy market participation, emphasizing adaptability and foresight. The endorsement of new benchmarks and the embrace of trading as a future-ready element in the oil industry’s evolution reflect a proactive positioning in the face of global energy shifts.

As the dust settles on Aramco’s initial trades, the implications for the oil market are clear: the Brent benchmark is likely to become even more robust, with Aramco’s participation underscoring the interconnected nature of oil markets. A more stable and diversified benchmark not only benefits Aramco’s trading objectives but also offers a more reliable indicator for global oil pricing—a critical factor for all market participants in this dynamic sector.

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Story Snapshots:

• Indian government bond yields saw a slight rise early Tuesday.
• Local inflation data met estimates, shifting focus to U.S. inflation figures.
• The Reserve Bank of India maintains a careful stance on rate cuts, focusing on sustainable inflation targets.

What is the current state of Indian government bond yields and what factors are influencing their movement? Indian government bond yields edged higher in early trade on Tuesday, as market participants adjusted their positions following local inflation data that met expectations. The focus is now shifting to the upcoming U.S. inflation data, which could significantly impact bond yield trends.

In Mumbai’s early trading hours, there was a discernible shift in government bond yields. Traders, having built positions in anticipation of local inflation figures, started to recalibrate their strategies as the data came in line with forecasts. India’s benchmark 10-year yield was observed at 7.1023%, a fractional ascent from its previous close of 7.0946%.

A trader from a primary dealership indicated that the unwinding of positions is already in motion, with a cautionary eye on the U.S. 10-year yield, which, if it crosses the 4.20% threshold following the U.S. inflation revelation, could prompt a more pronounced selloff.

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India recorded a retail inflation rate decrease to 5.10% in January, down from December’s 5.69%, aligning closely with the 5.09% projected by economists. Although the government does not officially report core inflation, economists anticipated a drop to 3.6% from 3.8%.

The Reserve Bank of India’s recent policy stance remained unchanged, underscoring its commitment to achieving the medium-term inflation target of 4% sustainably. Governor Shaktikanta Das mentioned the inherent challenge in navigating the “last mile of disinflation,” a task the central bank is keenly aware of as it aims for price stability.

With a gradual rise in real rates, Barclays projects that the RBI may start easing its policy in the April-June quarter, considering vigilant monitoring of food prices by the Monetary Policy Committee.

Meanwhile, U.S. 10-year yields hover high but have yet to surpass the pivotal 4.20% mark. The upcoming inflation report is greatly anticipated, as it will provide further guidance on the Federal Reserve’s rate cut timeline. The likelihood of a Fed rate cut in May has decreased slightly, with some analysts now suggesting that easing may begin only from June.

Domestic market attention is also drawn to a state debt sale worth 175 billion rupees ($2.11 billion) and the upcoming central government debt auction—the final one for this fiscal year. These events, coupled with the forthcoming U.S. inflation data, are set to play a key role in shaping India’s bond market trajectory.

This confluence of domestic estimates and international economic signals illustrates the interdependent nature of global financial systems. As India navigates its monetary policy amidst local inflation targets and global rate dynamics, the bond market’s reactions serve as a barometer for investor sentiment and economic stability.

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Story Snapshots:

• The Pakistani rupee appreciated marginally against the US dollar in early trading.
• The rupee strengthened by Re0.08 in the inter-bank market.
• IMF criticized the government’s tariff and circular debt plans as ineffective for energy sector issues.
• Oil prices remained stable, keeping currency parity in check amid global uncertainties.

What recent movement has the Pakistani rupee made against the US dollar, and what are the implications for the economy? The Pakistani rupee has registered a marginal increase against the US dollar, appreciating by Re0.08 in early inter-bank trading, indicating slight economic optimism despite broader challenges.

As trading commenced on Tuesday, the Pakistani rupee nudged upward, appreciating slightly against the US dollar in the inter-bank market. The uptick, a modest Re0.08, brought the exchange rate to 279.25, signaling a fractional respite for the currency that had experienced a marginal fall the day before, according to data from the State Bank of Pakistan (SBP).

Read: MSCI Upgrades 19 Pakistani Firms to Small Cap, 3 to Frontier Markets Indexes

This subtle flux comes during a period of rigorous scrutiny from the International Monetary Fund (IMF), which has questioned the efficacy of the Pakistani government’s tariff rationalization and circular debt management plans. IMF Mission Chief Nathan Porter voiced concerns via a message that the proposal, while ambitious, may fall short in addressing the fundamental issues of Pakistan’s energy sector. Weighted implications of these developments, particularly on vulnerable households, are under close observation.

On the global front, the US dollar played with the psychological barrier of 150 yen, while the market was alert for the U.S. inflation data release. Meanwhile, Bitcoin showed resilience, maintaining its stance around the $50,000 mark, illustrating the wider digital currency market’s reaction to the evolving economic climate.

Market activity in Asia maintained a sedate pace, with major markets such as China and Hong Kong closed for the Lunar New Year holidays. Furthermore, the guarded approach by traders, conscious of the impending U.S. consumer prices data, presented an atmosphere of cautious anticipation.

The dollar’s slight movement against other currencies, evidenced by a 0.02% rise to 104.16 on the dollar index, is part of a broader narrative of currency market reactions to internal and external stressors. Analysts continue to regard the 150 yen level as significant, anticipating potential intervention from Japanese officials to uphold their currency’s position.

Oil prices, a crucial barometer of currency parity, exhibited little change, hinting at a complex interplay of factors including the potential trajectory of US interest rate cuts and geopolitical tensions in the Middle East that could disrupt supply lines. Brent futures inched down by a mere cent to $81.99 a barrel, whereas U.S. West Texas Intermediate (WTI) crude drew level with a one-cent increase to $76.93 a barrel.

As these narratives converge, the interplay between the Pakistani rupee’s performance, the IMF’s scrutiny, and the steadiness of oil prices underscore the delicate balance of economic forces at play. The day ahead promises to unfold with further developments that stakeholders and market watchers will evaluate for both immediate impact and long-term economic trends.

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LIG Nex1’s surface-to-air missile system, the Cheongung M-SAM II, stands as the centerpiece of this transaction. The system, also known as the ‘Iron Hawk II,’ is a mid-range, medium-altitude missile defense platform designed to neutralize airborne threats, including ballistic missiles and aircraft. With the acquisition of 10 batteries of this state-of-the-art system, Saudi Arabia is significantly enhancing its defensive posture.

This defense deal was unveiled on the sidelines of the World Defense Show in Riyadh, a testament to South Korea’s growing status as a significant player in the global arms market. The agreement not only marks a significant export success for LIG Nex1 but also reflects the deepening ties between South Korea and Saudi Arabia in matters of defense and security cooperation.

Furthermore, the Cheongung M-SAM II system showcases a leap in missile defense technology. It boasts an array of sophisticated features such as multi-target engagement capability and radar-evading stealth interception, offering a layer of defense that could deter or mitigate aerial attacks on critical infrastructure and urban centers.

South Korea’s Ministry of National Defence and Saudi Arabian defense officials have shown mutual enthusiasm for the agreement, emphasizing the strategic importance of the missile system in safeguarding national security. The deal is a clear signal of South Korea’s dedication to expanding its defense exports and highlights its technological prowess in a fiercely competitive market.

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Additionally, the economic implications of this agreement are substantial. Not only does it signal a significant revenue influx for LIG Nex1, but it also opens doors for future cooperation and exports to other nations looking to upgrade their defense systems.

As tensions in the Middle East ebb and flow, the need for advanced defense systems remains paramount. Saudi Arabia’s investment in the Cheongung M-SAM II is a proactive step toward ensuring its airspace remains secure. The system’s versatility in engaging various threats provides a strategic shield, integral to the nation’s defense strategy.

In conclusion, the successful sealing of this deal represents a significant stride for both countries involved. For South Korea, it marks a major export achievement and a testament to its growing defense technology sector. For Saudi Arabia, it signifies a bolstering of national defense in uncertain times. As this partnership materializes, it stands as a testament to the pivotal role defense trade plays in international relations and the continuous push for security in a rapidly changing geopolitical landscape.

Tags: #SouthKorea, #SaudiArabia, #DefenseDeal, #MissileSystem, #InternationalSecurity

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This pivotal arrangement not only commemorates the 20th anniversary of Qatar’s inaugural LNG shipment to India but also promises to cement and expand an already robust energy relationship. As announced by Qatar’s Energy Minister and CEO of QatarEnergy, Saad al-Kaabi, the first LNG deliveries under this agreement are scheduled to commence in May 2028.

Read: Gulf Markets Dip Amid Tensions; Saudi Stocks Buck Trend

The significance of this deal cannot be overstated. It comes at a time when nations across the globe are diversifying their energy portfolios, and India is no exception. The Indian government’s vision to amplify the role of natural gas in its energy sector aligns seamlessly with the guaranteed supply from one of the world’s leading LNG producers.

Qatar’s prominence in the global LNG market is well-established, ranking alongside the United States, Australia, and Russia as a top producer. Their ability to secure long-term agreements – recent deals with powerhouse economies like China, France, Britain, and Italy offer ample proof – showcases Qatar’s strategic approach to solidify its position as a key energy supplier on the international stage.

The strategic significance of the India-Qatar deal is magnified further when considering the current geopolitical climate. As European nations grapple with uncertain gas supplies due to the ongoing conflict in Ukraine, Qatar’s role as an energy supplier has taken on new importance. This deal with India underlines the emirate’s growing influence and its capability to deliver stability to energy markets, particularly in Asia.

For India, the agreement is a leap towards achieving its ambitious energy goals. By increasing the contribution of natural gas in its energy mix, India is not only looking to ensure energy security but also to meet its environmental commitments. Natural gas, as a cleaner alternative to coal and oil, could play a critical role in India’s pursuit of a sustainable and greener future.

Moreover, the deal is a testament to the durability of international partnerships. Celebrating two decades since Qatar’s first LNG shipment to India, this extended contract reflects mutual trust and a shared commitment to long-term cooperation. It isn’t just a business transaction; it’s a strategic alliance that underpins the energy security of the world’s second-most populous nation.

As India prepares to welcome this influx of Qatari LNG, the impact of this agreement extends beyond the immediate boost to its energy sector. It represents a confident stride toward a stable, diversified, and sustainable energy future for India and exemplifies the potential of international collaboration in addressing global energy challenges.

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In the quarter ending December, Apple’s China sales plummeted by 13% to a stark $20.8 billion, falling short of the anticipated $23.5 billion. This downturn sent shares tumbling nearly 3% in premarket trading as the news broke out. China represents Apple’s third-largest market, making this sales dip more than a bump in the road; it’s a potential shift in consumer sentiment and market dynamics.

Analysts point to a potent combination of fierce domestic competition and conservative consumer spending amid an economic cooldown. Brands like Huawei, riding high on national sentiment and innovation, have surged back into the high-end market with offerings like the Mate 60 series, boasting chips of domestic pedigree. Meanwhile, Xiaomi, another home-grown champion, isn’t far behind, appealing to local tastes and wallets with its premium Mi 14 models, which flew off the shelves with 1 million units sold within the first week.

What lies at the core of this challenge for Apple, according to Toby Zhu of Canalys, is the pressure from these Chinese manufacturers who are encroaching upon Apple’s premium price segment with attractive foldables and advanced AI features. It’s a scenario that’s compelling Apple to re-evaluate its innovation strategy to keep up with the demanding pace set by local competitors.

Read also: IMF Predicts China’s Economic Slowdown Until 2028

Besides battling brand rivals, Apple also confronts changing consumer behaviors. The economic slowdown has led to longer upgrade cycles, with Counterpoint Research noting that handset replacements are now stretching past 40 months.

In a bid to buoy sales, Apple has resorted to unusual price cuts, with hefty discounts online to clear inventories of the iPhone 15 just a month post-launch. Even more telling was the January move to slash iPhone prices directly, a rare strategy shift by the tech giant.

Yet, despite these efforts, Apple’s market hold seems to be slipping. Data from IDC illuminates the tough landscape, showing a marginal 2.1% drop in Apple’s phone shipments in the last quarter of 2023. In stark contrast stands Huawei, which has boasted a 36.2% sales rise.

With this, the forecast for Apple looks overcast. Analysts at Jefferies anticipate Apple’s shipments in China to tumble by double digits in 2024. Bob O’Donnell of TECHnalysis Research underscores the gravity of the situation, suggesting that this “big miss in China” could herald the start of a more protracted decline.

Apple’s saga in China is becoming a tale of resilience and adaptability. As local contenders up their game, the tech behemoth must not only rekindle the innovative spark that once set it apart but also understand the evolving narrative of consumer loyalty and national pride. One thing is clear — the battle for China’s smartphone supremacy is far from over, and it will take more than just brand power for Apple to reclaim its lost ground.

Reads: #Apple #ChinaMarket #SmartphoneCompetition #EconomicSlowdown #TechInnovation

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Navigating the choppy waters of the global economy, the Reserve Bank of India (RBI) actively engages in the foreign exchange market. Its primary aim is not to dictate the direction but to smooth out the sharp edges of excess volatility that often plague the rupee’s value against other currencies. This intervention is a delicate balancing act, reflecting changes not only due to market tactics but also because of the ebb and flow of currency assets’ values.

India’s strategy involves more than just currency stabilization. The nation’s forex reserves are a multilayered financial cushion comprising foreign currency assets, gold reserves, and a reserve tranche position within the International Monetary Fund (IMF). Each layer serves as insurance against external shocks, allowing the country to weather global financial storms.

Read: IMF Predicts China’s Economic Slowdown Until 2028

During the reported week, the rupee witnessed minimal turbulence, hovering between 83.0575 and 83.1650. Despite the narrow range, the currency recorded marginal weekly losses, settling at 82.9175 on Friday. Yet, in a modest victory for stability, the rupee clinched a 0.2% gain for the week—small, but not insignificant, in the grand chessboard of forex markets.

The RBI’s interventions could be seen as part of a broader, more cautiously optimistic outlook on India’s economic stability. With substantial reserves at hand, India is positioning itself as an economy capable of absorbing external pressures, be they from fluctuating oil prices or shifts in global capital flows.

As the rupee’s performance continues to reflect the complex interplay of domestic policy measures and international dynamics, market participants and observers alike will be keenly watching the RBI’s next moves. The central bank’s strategies, aimed at holding the line against volatility, have so far managed to maintain a semblance of stability in the face of prevailing global uncertainties.

Businesses and investors, both domestic and international, stand to benefit from such steadiness in currency markets. A stable rupee can foster a more predictable business environment, encouraging investment, and facilitating smoother trade negotiations.

India’s recent boost in foreign exchange reserves sends a reassuring signal to the market, suggesting that the country is well-equipped to handle the intricacies of the global financial ecosystem. With vigilant eyes on the horizon, India is not just defending its economic front but is also laying down a marker of its resilience and strategic financial planning for the future.

Trends: #IndiaEconomy, #ForexReserves, #RupeeStability, #RBIIntervention, #GlobalFinance

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The backdrop to these earnings is a global energy landscape that has been anything but stable. The aftermath of geopolitical tensions, most notably Russia’s incursion into Ukraine, sent oil and gas prices skyward. However, as these prices have gradually subsided from their peak, oil companies have braced for a reduction in profits. Analysts predicted a roughly one-third decrease from the record earnings in 2022, yet Exxon Mobil has navigated these choppy waters with remarkable acumen.

Read: Poland Beats Forecast with Slimmer 2023 Budget Deficit

The financial narrative for Exxon Mobil includes a strategic maneuver to write off less desirable assets, exemplified by a $2.5 billion impairment charge for California properties lingering on the market. This move to clean up the balance sheet is in line with the industry’s trend, with peers like Chevron and Shell also undertaking significant write-downs as they reposition for future growth.

Strengthening its core business, Exxon has been assertive in the acquisition sphere, with the purchase of Pioneer Natural Resources set to enhance its shale oil production in the Permian Basin. Similarly, Chevron’s move to acquire Hess Corp underscores a strategic push by major players to consolidate and expand their portfolios. These bold steps emphasize the sector’s focus on shoring up assets that promise long-term profitability.

The fourth quarter of 2023 saw a noteworthy performance from Exxon, with a profit of $9.96 billion exceeding analyst projections. This success was driven, in part, by an elevated trading profit in its fuels business. The company’s Chief Financial Officer, Kathryn Mikells, cited a refined approach to fuel specification and logistics as a key contributor to these gains — a strategy that Exxon expects to continue yielding benefits.

In the geographical arenas of the US and Guyana, increased oil and gas production has been another driver of Exxon’s strong performance. Investment in these regions has been significant, with capital spending nudging up by 4% over the previous year, consequently pushing the full-year project spending to over $26 billion.

Returning value to shareholders also remained a top priority as evidenced by Exxon’s distribution of $32 billion through buybacks and dividends last year, marking an increase from the preceding year. Looking ahead, the company has earmarked between $23 billion to $25 billion for capital spending in the coming year, laying the groundwork for projects expected to come online by 2025.

As Exxon Mobil sets its sights on the future, with strategic acquisitions and investments poised to bolster its market position, its robust performance in 2023 serves as a testament to the resilience and adaptability of the oil major. Despite the industry facing a retreat from the dizzying heights of 2022, Exxon’s results reflect not only its ability to effectively navigate current market dynamics but also its strong positioning for continued success in the evolving energy landscape.

Trends: #ExxonMobil #OilIndustry #EnergyMarket #ProfitReport #InvestmentStrategy

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In a striking display of budgetary restraint, Poland’s deficit clocked in at 85.57 billion zlotys ($21.57 billion), a figure that comfortably outperforms the revised budget target of 92.0 billion zlotys. This announcement has rippled through economic circles, raising eyebrows and prompting a closer examination of Poland’s fiscal management.

Read: IMF Predicts China’s Economic Slowdown Until 2028

Underpinning these savings, the finance ministry credits the meticulous budgeting for pre-financing EU projects, guarantee programs, and social insurance contributions. Such fiscal tightening comes as a refreshing contrast to the trend of swelling deficits in a number of economies globally, stirring a dialogue on the sustainability of public finances.

However, the horizon holds a new set of challenges for Poland. The projected deficit for 2024 sees a steep climb to 184 billion zlotys, surpassing earlier estimates. This uptick factors in a slew of policy implementations by the government, including pay rises across the public sector—a move that will test the bounds of the country’s financial discipline.

Delving deeper, this fiscal calibration suggests a nuanced strategy. Amidst Europe’s complex economic tableau, balancing austerity with growth-stimulating expenditure remains a delicate act. Poland seems to be walking this tightrope with an eye on both immediate frugality and future investments in its workforce.

Furthermore, the implications of these budgetary dynamics extend beyond Poland’s borders. As economies intertwine, the health of one is often a bellwether for regional stability. Poland’s fiscal positioning, therefore, holds relevance for European markets at large, poised as a microcosm of the broader economic climate.

As Poland navigates this intricate fiscal landscape, stakeholders and policymakers will be observing keenly. The outcomes will not only shape the nation’s economic trajectory but also enrich the discourse on managing public finances amidst unpredictable global currents.

With this backdrop in mind, the fiscal journey of Poland is set to be a compelling narrative of adaptation and resilience in the face of evolving economic conditions. Whether this careful balancing of the books will translate into long-term stability and prosperity is a story that will unfold in the chapters to come.

Trends: #PolandEconomy, #FiscalPolicy, #BudgetDeficit, #PublicSpending, #EuropeanUnion

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