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February 2018

Gulf Industry Magazine helps you catch up with the numbers behind economic and industrial developments in the region.


Middle East air freight volumes up 6.6pc

THE Middle East carriers’ year-on-year total freight volumes increased 6.6 per cent in November, and capacity increased 3.1 per cent, according to data released by The International Air Transport Association (Iata).

During the same period carriers in the Middle East region posted 6.6 per cent growth in international freight volumes –the slowest regional year-on-year growth for the second time in three months, said a statement.

Iata released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), climbed 8.8 per cent in November 2017 compared to the year-earlier period. This was an increase from the 5.8 per cent annual growth recorded in October 2017. Despite indicators pointing to air cargo having passed a cyclical growth peak, demand remains strong.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.0 per cent year-on-year in November. This was the 16th consecutive month in which demand growth outstripped capacity growth, which is positive for industry load factors, yields, and financial performance.

The uptick in freight growth coincides with the traditional period of strong demand seen in the fourth quarter. November’s robust performance puts the air cargo industry on track to achieve its strongest operational and financial performance since the post-global financial crisis rebound in 2010.

Alexandre de Juniac, director general and CEO, Iata, said: “Air freight demand remains robust. November showed 8.8 per cent year-on-year growth, keeping up the momentum that will make 2017 the strongest year for air cargo since 2010.”

 

Dubai non-oil growth slows down

DUBAI’S non-oil private sector grew at the slowest pace in December since October 2017, according to the latest Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions.

The seasonally adjusted Index eased to 54.7 in December, from 55.3 in November. The latest reading indicated the slowest rate of improvement for 14 months.

By sector, wholesale & retail (index at 54.9) was the best performing category, closely followed by construction (index at 53.5). The travel and tourism sector (51.2) experienced the slowest improvement in business conditions. A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

Khatija Haque, head of Mena Research at Emirates NBD, said: “The decline in the Dubai Economy Tracker index in December is a little surprising, but appears to be broad-based across all the key sectors.  Nevertheless, a reading of 54.7 still indicates economic growth in December. Looking at 2017 as a whole, the survey data suggests that Dubai’s economy grew at a faster rate than both 2015 and 2016.” 

 

Oman GDP surges 10pc to over $52bn

OMAN’S gross domestic product (GDP) at the end of the third quarter of 2017 increased by 10.1 per cent, recording RO20.3 billion ($52.6 billion) from RO18.4 billion in the previous quarter, according to the National Centre for Statistics and Information (NCSI). Oil activities rose by 23.9 per cent to touch RO6.2 billion compared with RO5.042 billion at the end of the third quarter of 2016. The share of crude in oil activities at the end of the third quarter was valued as RO5.2 billion, which is a rise of 27.8 per cent at the end of the third quarter of 2016, when it was at the level of RO4.1 billion.

Natural gas increased by 6.3 per cent to RO983.9 million from RO925 million at the end of the third quarter of 2016. By the end of the third quarter of 2017, total non-oil activities were valued at RO14.7 billion, which is an increase of 4.9 per cent over the value at the end of the third quarter of 2016.

The services activities, which are at the forefront of non-oil activities stood at RO10.3 billion, which is an increase of 5.7 per cent at the end of the third quarter of 2016. The services activities were at the level of RO9.7 billion.

 

Bahrain non-oil growth to stay strong

BAHRAIN’S non-oil growth will remain resilient in 2018 and 2019, with GCC investments keeping infrastructure spending levels elevated. This will help offset oil sector weakness and keep overall growth close to a reasonable 3 per cent, a report said. Inflation will rise to 2.5 per cent in 2018 on the planned VAT as well as firmer housing and food inflation. The VAT is expected to add some 2 per cent to the overall inflation rate, the NBK Economic Update said.

The budget deficit is forecast to gradually narrow, but remain high at 8-10 per cent of GDP.  Public spending levels will stay elevated to support infrastructure projects. Weaker foreign reserve levels are applying pressure on the currency peg to the US dollar. But it is expected that the government will remain committed to the peg, it said.

Growth will continue at a decent pace of around 3% in 2018 and 2019, as resilience in the non-oil economy continues to offset weakness in the oil sector. Oil sector output is set to be flat in 2018 given Bahrain’s participation in the Opec/non-Opec oil production cut deal, now extended to the end of 2018. With an average compliance rate of only 54 per cent so far in 2017, Bahrain could potentially cut oil output further in 2018. However, given that its share of overall production cuts is very small, it may not be pressured to more fully comply with the deal.

 

Oman’s non-oil exports up 31pc

OMAN’S non-oil exports surged by 31.4 per cent to OR2.36 billion ($6.142 billion) for the first nine months of 2017, from OR1.79 billion ($4.67 billion) for the same January-September period of the previous year, said a report.

A major recovery in energy prices indirectly helped the country to strengthen its non-oil export revenue as well. Since prices of several petrochemical products are positively correlated to global prices of energy, Oman could gain immensely with a rise in oil prices, added the Times of Oman report.

A considerable growth in exports of mineral products, chemical products, plastics and rubber and electric machinery aided the recovery in non-oil exports, revealed the latest monthly statistics released by the National Centre for Statistics and Information (NCSI).

Among the non-oil product categories, exports of mineral products shot up year-on-year by 51.5 per cent to OR640 million ($1.66 billion), while exports of chemical products was up by 41.9 per cent to OR610.10 million ($1.58 billion) during January-September period of 2017, over the same period of last year.




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