June 2017

Gulf Industry Magazine brings you the latest tenders available in the Gulf region.

Saudi non-oil revenue to back govt spending

The expected increase in Saudi Arabia’s non-oil revenue will support higher government spending in the remainder of 2017, said a new report from Al Rajhi Capital, a top financial services provider in the kingdom.

Government revenue increased to SR144 billion ($39 billion) during the first quarter (Q1) of the year, while expenditure was SR170 billion, implying a deficit of SR26 billion, the report highlighted.

The reported Q1 deficit is half the quarterly target of SR49.5 billion. On a quarterly run rate, lower Q1 deficit was mainly due to significantly lower expenditure than target, while Q1 revenue (though up 115 per cent y-o-y) was only slightly lower than the projected run rate of SR170 billion.

“We believe the lower Q1 deficit leaves ample headroom for government spending to rise in the remainder of 2017. However, oil price continues to remain an important determinant of the level of government spending going forward,” Al Rajhi Capital said in the report.

The expected increase in government spending, together with reinstatement of allowances for public sector employees is likely to boost growth in the economy. The government is planning to borrow SR70 billion locally in 2017 and SR37.5-50 billion ($10-15 billion) internationally to fund the 2017 deficit, the report said, quoting data from Bloomberg.

“According to our calculations, banks have around SR100 billion of excess liquidity which can meet Saudi govt’s local borrowing plan of SR70 billion. We also note that the government’s current account (deposits and reserves of the Govt in Sama) has reduced by SR50.6 billion in Q1 (from SR89 billion at the end of 2016 to SR38.4 billion at the end of Q1), which is more than Q1 fiscal deficit of ~SR26 billion.


UAE economic growth set to rebound: IMF

The UAE is adjusting well to the new oil market realities and the country’s economic growth is set to rebound, said an International Monetary Fund (IMF) mission.

The IMF mission, led by Natalia Tamirisa, visited the UAE from April 30 to May 14 for the annual Article IV discussions.

In a statement following the mission’s visit to the UAE, she said the UAE’s large financial buffers, diversified economy and the authorities’ robust policy responses are facilitating the adjustments while safeguarding the economy and the financial system. 

“Non-oil growth is projected to rise to 3.3 per cent in 2017, reflecting more gradual fiscal consolidation, stronger global trade, and higher Expo 2020 investment. Oil GDP is projected to decline by 2.9 per cent reflecting agreed Opec cuts in oil production. As a result, overall growth will ease to about 1.3 per cent in 2017, before recovering to above 3 per cent over the medium term. Average inflation is projected to rise to 2.2 per cent in 2017.

“With the prospects of firmer oil prices, the government’s budget deficit is projected to decline to 4.5 per cent of GDP and the current account surplus to improve to 2.4 per cent of GDP in 2017,” she said.


Bahrain business confidence index gains in Q2

The business confidence index in Bahrain has amounted to more than 19.91 positive points in the second quarter of 2017, according to a survey conducted by the Information & eGovernment Authority (iGA).

The survey measures indexes of investors’ confidence, evaluate the current situations as well as expectations of their future performance and activities in Bahrain.

About 41.8 per cent of institutions expressed their optimism in the continued improvements of the business commercial environment performance as well as its activity during the upcoming period. On the other hand, 49 per cent of respondents expected business conditions to remain at the same pace, while 9.2 per cent of institutions expressed dissatisfaction towards their future situation and trade.

As for opinions of institutions of their situation during the first quarter of 2017, the survey showcased that 24.8 per cent of institutions expressed their satisfaction with the performance of their work while 17 per cent of these institutions were dissatisfied during the first quarter of this year. Survey results also comprised the measuring of confidence in business environment according to the size of the institution, sector, industry as well as type of investment.


Dubai Economy new licences up 12pc in Q1

DUBAI Economy saw a 12 per cent increase in business licences issued during the first three months (Q1) of 2017 compared to the same period in 2016, indicating remarkable optimism among investors and stability across industry sectors.

Total number of licences issued in Q1 2017 was 5,387 as against 4,808 in Q1 2016 while new businesses that took off in Dubai also increased 126.5 per cent year-on-year, from 136 to 308.

“New initiatives and innovative sectors being opened up as part of economic diversification and the Expo 2020 continue to provide vast opportunities for businesses and investors in the emirate,” said Omar Bushahab, CEO of Business Registration & Licensing (BRL) in Dubai Economy.

“Dubai Economy on its part has taken giant strides in enhancing ease of business and competitiveness as part of our strategic objective of enabling sustainable growth and positioning Dubai as the preferred investment destination,” added Bushahab.

Altogether, the BRL sector handled 63,353 licensing transactions in Q1 2017 compared to 62,433 such transactions in Q1 2016, a 1.5 per cent increase. Trade name reservations saw a 0.6 per cent increase, from 10,376 to 10, 437. A 52.1 per cent increase – from 330 to 502 – was also seen in the number of certificates issued by BRL to businesses for various purposes between the two quarters.


Dubai bus user numbers hit 38.6m in Q1

Dubai’s Roads and Transport Authority (RTA) said its public buses had lifted 38,616,365 riders during the first quarter of this year, compared with 37,654,468 riders lifted during the same period last year.

The figure indicates a growth rate of about 2.5 per cent in bus ridership, a Wam news agency report added.

Basel Saad Ibrahim, director of buses, RTA Public Transport Agency, said that the sustained increase in the ridership of public buses in Dubai is indicative of the growing culture of using public transport means amongst various community segments.

He added that it underscores RTA’s keenness to provide spacious buses offering accurate service integrated with other mass transit modes such as the metro, tram and marine transport. Ibrahim noted that it is also attributable to the facilities associated with these transit modes such as stations and air-conditioned bus shelters across Dubai, including 100 smart air-conditioned shelters offering various smart services to the public.

More Stories