01 February 2020

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


Mena GDP growth seen at 2.7pc in 2020: MUFG

REGIONAL real GDP growth is forecast to expand by 2.7 per cent in 2020 from a near flat 0.1 per cent in 2019, said Mitsubishi UFJ Financial Group (MUFG), a Japanese financial services company, in its first Mena Economic Weekly of the year.

Other key highlights from the Mena Economic Weekly report:

• Saudi Arabia was the Mena regional outperformer in 2019 and this trend will follow in 2020.

• Oil prices fell on average by over 10 per cent in 2019, despite registering stronger year-on-year (y/y) growth. The report expects this bearish trend to continue in 2020, notwithstanding recent geopolitical tensions.

• Attending to growing financing needs in a volatile oil price environment has driven Mena oil exporters to increasingly diversify their sources of financing over the years. The report stated that most of these countries have the capacity to finance their deficits and investment programmes.

• The report said that Saudi Arabia as well as the rest of the region will accelerate privatisation plans this year, which is in line with the economic transformation strategy wherein the state slowly withdraws and allows the private sector to lead.

• Looking ahead, the expectation is that the region will come out of deflation with prices rebounding in 2020 owing to a rebuild of pricing pressures due to a pick-up in non-oil GDP activity.

• Dubai’s economy is growing at its slowest pace since the financial crisis in 2009 with real GDP growth at only 2.1 per cent in H1 2019. Having said this, expectations are for Dubai to witness a rebound in economic growth this year along with renewed business optimism surrounding future output.


UAE-Japan non-oil trade tops $130bn

THE total value of non-oil trade between the UAE and Japan reached Dh481.34 billion ($130.8 billion) over the past 10 years from 2009 to 2019, a media report said.

These statistics highlight the growing trade and economic relations between the two countries, with the value of their overall trade in the first half of 2019 reaching Dh26 billion, reported Emirates news agency Wam, citing statistics from the Ministry of Economy.

The mutual visits between their leadership of both countries, which led to the signing of 24 agreements and memorandums of understanding (MoUs) helped advance their relations to the level of strategic relations in 2018.

According to official records from the ministry and the Federal Competitiveness and Statistics Authority (FSCA), Japan is one of UAE’s leading trading partners, with the value of their non-oil trade reaching Dh54.46 billion in 2018 while Japan’s investment in the UAE amounts to Dh14.3 billion. These investments have played a key role in strengthening the economic and trade relations between the two countries.

Japanese investments in the UAE are concentrated in the sectors of technology, renewable energy, transportation, healthcare, wholesale and retail trade, and the production of polyethylene and polypropylene.


ME air freight volumes down 3pc in November

MIDDLE Eastern airlines’ freight volumes decreased 3 per cent in November 2019 compared to the year-ago period – a significant improvement over the 5.7 per cent decrease in October, new data showed.

Capacity increased by 2.6 per cent. Against a backdrop of operational and geopolitical challenges facing some of the region’s key airlines, seasonally-adjusted freight volumes in the region have continued a modest upward trend which is a positive development for the region’s carriers. However, escalated geopolitical tensions threaten the regions’ carriers in the period ahead, according to data released by the International Air Transport Association (Iata).

Airlines in Asia-Pacific, Latin America and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in November 2019, while North American carriers experienced a more moderate decline. Europe and Africa were the only regions to record growth in air freight demand compared to November last year. Overall, global air freight markets showed that demand, measured in freight tonne kilometres (FTKs), decreased by 1.1 per cent in November 2019, compared to the same period in 2018, marking the 13th consecutive month of year-on-year declines in freight volumes.


UAE gold, diamond trade in 2018 tops $70bn

THE value of the UAE’s trade in raw and semi-worked gold and diamonds in 2018 amounted to Dh258.4 billion ($70.3 billion), a media report said.

The gold and diamond trade accounted for around 15.8 percent of the UAE’s total non-oil trade in 2018, valued at Dh1.628 trillion, reported state news agency Wam, citing statistics from the Ministry of Economy. With the ongoing growth in the gold and diamond trade, the country was ranked first in the region in precious metal exports and re-exports in 2018.

To support the sector, the government decided two years ago to exempt the gold and diamond trade from value added tax, VAT, which improved its competitiveness and increased its trade activity. Statistics issued by the Ministry of Economy and the Federal Tax Authority and the Federal Competitiveness and Statistics Authority highlight the fact that the UAE’s export of raw and semi-worked gold amounted to Dh53.4 billion, or around 25.2 percent of the country’s exports in 2018 totalling Dh212 billion. The country’s gold imports were valued at Dh111 billion during the same reporting period, or 11.8 per cent of the country’s imports in 2018 totalling Dh938 billion.

The country’s diamond imports amounted to Dh43.7 billion at the end of 2018, while the value of the re-export trade of this precious metal reached Dh50.3 billion.


Mideast to add 121mtpa of petchem capacity

THE Middle East is expected to have the second highest petrochemical capacity additions globally, behind Asia, between 2019 and 2030, according to a report.

The region will contribute about 121.2 mtpa of the total global new-build and expansion petrochemical capacity additions by 2030, according to GlobalData, a leading data and analytics company. Major capacity additions for the Middle East will be from Iran, with a new-build and expansion capacity additions of 75.9 mtpa by 2030, it said. Asia is expected to lead the global petrochemical industry capacity growth from new-build and expansion projects between 2019 and 2030 with 50 per cent share. The report reveals that the total petrochemical capacity of new-build and expansion projects in Asia is expected to be 311.4 million tonnes per annum (mtpa) by 2030.

Of this capacity addition, 292.3 mtpa will come from new-build projects and the remaining 19.1 mtpa will come from expansion projects.

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