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August 2013

Saudi among top G20 performers
SAUDI Arabia has been one of the best performing G20 economies in recent years, and has supported the global economy through its stabilising role in the global oil market, the International Monetary Fund (IMF) was quoted as saying in a report.

IMF said the Saudi economy grew by 5.1 per cent in 2012, benefitting from high oil prices and output, strong private sector growth, and government spending. Inflation has risen over the past year to 3.8 per cent in May 2013, driven by higher food prices and housing costs.

Looking ahead, growth is projected to slow to 4 per cent in 2013, IMF said.

Saudi Arabia has also provided generous financial support to countries in the Middle East region, IMF said, after its executive board concluded the Article IV consultation with the kingdom, according to the Arab News report.

 

Rise in mobile banking predicted
EXPERTS predict that mobile banking in the Middle East and Africa will jump from 19.8 million users to 82.1 million users by 2017.

Over the last five years, the developing world has experienced substantial growth in the adoption of mobile technology.

Emerging markets offer not only new possibilities for traditional banking but major potential for transformative banking, said a statement from Gemalto, a leader in digital security.

Gemalto has come up with an innovative mobile payment guide, the 2013 Gemalto Netsize Guide, aimed at providing insight for users, mobile operators, banks, credit card companies and merchants.

“Mobile billing revenues worldwide are expected to rise by $13 billion per year by 2017,” said Mohamed Anis Chemli, business director, telecommunication division at Gemalto Middle East.

“The popularity of the smartphone depicts the rise in mobile usage. This is why the guide explores the big picture of mobile security, identity, privacy, and social commerce, while focusing on mobile wallets, in-app micropayments and money transfer, operator billing and messaging, as well as Near Field Communication (NFC).”

According to Juniper Research, 11.9 million mobile users in the Middle East and Africa made transactions through mobile in 2012 and figures are expected to reach 71.9 million users by 2017.

Kuwait sees $3.5bn fall in spending
KUWAIT expects to spend around KD 1 billion ($3.5 billion) less in the 2013/14 fiscal year, according to the state budget published by the Ministry of Finance, despite the major oil producer forecasting higher revenue.

Kuwait, one of the world’s richest countries per capita, hiked state spending by 13 per cent in the last fiscal year as it grappled with a wave of industrial unrest.

However, since then, the International Monetary Fund warned Kuwait risks exhausting its entire oil savings by 2017 if it keeps spending money at the current rate.

A recently approved budget bill estimated overall revenues, after deducting 25 per cent for the Future Generations Fund (FGF), at KD13.57 billion compared with an expected total expenditure estimated at about KD21 billion, Kuwait’s state news agency (Kuna) reported citing Khalifa Hamada, undersecretary at the ministry of finance.

This compares to revenues of KD14 billion before the FGF deduction and expenditures of KD22 billion in the previous fiscal year.

Qatar’s real GDP to grow 6.8pc
QATAR’S real GDP expanded at a rapid pace in the first quarter of 2013 at 6.2 per cent year-on-year, maintaining the same momentum as in 2012, said a report by the Qatar National Bank (QNB) Group.

Growth figures for the first quarter confirm the continued process of diversification of the Qatar economy away from its traditional role as a hydrocarbon exporter toward a manufacturing and services hub, stated the report, citing Qatar Statistics Authority data.

At the same time, the current account surplus peaked on robust export performance and inflation remained moderate, it added.

Qatar continues to enjoy a strong economy with the real GDP growth to accelerate during the remainder of 2013 (reaching 6.5 per cent for the full year) and into 2014 (6.8 per cent), supported by large infrastructure investments and associated population growth which will more than offset the strong headwinds from the global economy, according to the QNB report.

Manufacturing was the fastest growing sector (12.5 per cent), boosted by production from the new Pearl gas-to-liquids (GTL) facilities, it stated.

According to QNB, the construction sector is booming, growing by 11.7 per cent (6.3 per cent in the first quarter alone) - an indicator that the rollout of Qatar’s infrastructure development programme is gathering steam.

On the other hand, the oil and gas sector – still the largest component of real GDP at 42 per cent – was the lowest contributor to growth, expanding only at an annual rate of 0.8 per cent as maintenance downtime at LNG facilities and fluctuations in oil production in late 2012 affected the first quarter results.

Bahrain financial outlook ‘stable’
BAHRAIN has received a major vote of confidence as Fitch, a leading global financial monitor, affirmed the kingdom’s key ratings and stated that the outlook is stable.

Fitch Ratings affirmed the kingdom’s long-term foreign currency Issuer Default Rating (IDR) at ‘BBB’ and local currency IDR at ‘BBB+’, according to a report in the Gulf Daily News, our sister publication.

The agency has simultaneously affirmed Bahrain’s country ceiling at ‘BBB+’ and short-term foreign currency IDR at ‘F3’.

The affirmation reflects the positive steps that have been taken towards resolving the domestic political stalemate with the National Dialogue restarting, the agency said.

Growth has rebounded after the unrest in 2011, picking up to 3.4 per cent in 2012 from 1.9 per cent the year before.

The normalisation of oil production, after technical problems, should allow growth to strengthen to 5.5 per cent this year, Fitch said.

Capital spending, manufacturing investment and a further recovery in tourism will support non-oil growth of around 3.5 per cent.

Fiscal deficits pushed the debt-to-GDP ratio to 36.6 per cent of GDP at the end of last year, on a par with the ‘BBB’ median, the agency said.




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