Proptech to expand Saudi footprint with its innovative business model

Scion Industrial ENgineering pvt. Ltd.

Aiming to reimagine the global living experience through its portfolio of tech-enabled branded residences Stella Stays is planning to become the biggest residential hospitality player in the region, said its co-founder and CEO.

Speaking to Arab News in an exclusive interview, Mohannad Zikra said that the Dubai-based proptech startup that is disrupting the global residential real estate sector with its innovative business model will be adding about 2,500 apartments regionally this year of which 50 percent is going to be in Saudi Arabia.

“We’re adding just over 1,200 apartments mainly focused on Riyadh but we’re also planning to launch soon in Jeddah,” he said. “We’re also looking at Dammam and Alkhobar.”

Zikra went on to add that he is eyeing opportunities in projects in the Kingdom where they are creating new cities. The Saudi Downtown Co., a master and lead developer owned by the Public Investment Fund, with 12 projects located in 11 regions across the Kingdom, for instance, is witnessing a lot of growth and Zikra is keen to tap opportunities in such projects.

Having started in 2019 by creating an offering where people can find and rent and move into a place within a few minutes, Stella Stays has rapidly grown its portfolio. It is keen to continue its expansion across major cities in the Middle East and North Africa region, Europe and North America.

Zikra wants to continue to focus on the region over the next 18 months. “We will obviously continue our growth in the UAE, Saudi Arabia, Egypt, and Turkey but we’re also looking at Morocco as a huge market for us,” he said. “Then we’re looking at Qatar as a potential market as well after what happened in the World Cup.”

Moving forward, he explained, Stella Stays will be looking at some of the emerging markets that have huge growth opportunities. Particularly countries like India, Indonesia, and Vietnam.

“You have Portugal as well that’s introduced the freelance visas,” he informed. “So in the next 24 months, we’ll go to markets like Asia that have huge growth potential and are among the top contenders in gross domestic product growth.”

Staying focused

When Stella Stays started it had some private investors in the UAE but today a lot of what the company is doing is partnering up directly with real estate developers. “When we partner with real estate developers, we’re able to take the buildings and we’re able to rebuild technology that allows us to reach 100-percent occupancy in our buildings within eight weeks,” Zikra informed.

“Hence, we’re able to generate cash flow very quickly from these buildings. And that’s been helping us fund a lot of our growth. So we took a different approach than some of these other startups that are just raising money to raise money.”

Unlike a lot of startups that are struggling because they focused on growing without caring about profitability, Zikra was always clear about building a profitable business from the very outset.

Not surprisingly, Stella Stays is not only profitable but also cash flow positive.

“We’re growing increasingly fast,” said Zikra. “Our average growth rate is about 250 to 300 percent per year since we started in 2019 until 2022.”

Having been successful in utilizing its funds, Zikra is now working with banks as well to help build a strong foundation and grow the team.

Stella Stays is also looking at partnering up with real estate investment trust funds because, according to Zikra, they have often faced difficulties in finding the right real estate investments. His company could be a good match for these funds as it has a successful business model with around 80 percent of its furnished apartments at full capacity at any one time.

By all accounts, there is a lot of demand for such apartments and people are also willing to pay a premium for them.

He added: “By 2024 we are looking at adding around 5,100 units. And for that, we’re starting to look at strategic partners and investors in the region, especially investors that are backed by sovereign investment funds because we’re seeing that there’s a very close relationship between what we’re doing and what we can contribute toward a lot of the government initiatives from a housing perspective.

“You look at Saudi Arabia and Vision 2030, there is a huge plan to grow the population,” Zikra continued. “And with that, they have needs to add over 100,000 homes over the next three years. And this means that these homes are going to have to be rented out. And they’re looking for partners where they can simplify that process.”

This is where a company like Stella Stays comes in. “We want to come in as a professional furnished apartment operator where we can come in and provide that consistency that you get in a hotel and provide that service,” said Zikra.

Branded, tech-enabled experience

“We don’t just take single apartments but we actually work with real estate developers and we take over buildings,” Zikra said.

“When you book a furnished apartment at Stella Stays, you are coming into a fully managed, branded tech-enabled operator, where from the moment you walk into the building, it’s our brand,” he added.

“In all of the apartments that are managed by us we provide that same consistency where you know you’re going to get a clean place and you know there’s going to be 24/7 support for your stay, whether it’s for one night, one week or one month or more.”

To its credit, Stella Stays has digitized the whole guest journey. It has done much the same thing with home rentals that Uber did with ride-hailing. A lot of its guests and residents come to its app or website, see all the different apartments that they have across the different cities, and choose the one they want.

“They can then choose their dates and pay by credit cards or pay by crypto,” explained Zikra.

“Then after that, they receive information for them to check-in. We have smart door locks across all of our units and access. They find the place, they pay for it, they move in, they can request services and all this without having to ever deal with a person.”

He added: “There’s no need to deal with real estate agents, no need to pick up the phone and make calls. Instead, we have completely digitized the experience.”

Way forward

Asked who his competitors were, and pat came Zikra’s reply: “Our competitors today are nothing other than just traditional landlords who own properties and rent them out on Property Finder and all these different marketplaces or these building owners who want to rent out their apartment on their own. That’s what we want to take over.”

“And that’s why more than anything, we’re partnering up with them and saying, listen, we can take over your assets,” he explained. “Just like Amazon’s done with shopping goods, we can do that with furnished apartments.”

He added that they have entered a brand new space that they have termed “residential hospitality.” According to Zikra residential hospitality is the ability to rent a residential apartment in a branded way.

“We want to take over and become the biggest landlord globally with our concept of allowing people to just show up and start living,” he concluded.

Source:https://www.arabnews.com/node/2236641/business-economy

Saudi Arabia, MENA growth outlook bright despite challenges, ministers say

The future looks bright for Saudi Arabia and other Middle East and North African economies, but governments in the region must be wary of geopolitical instability and inflation to sustain growth, ministers told the World Economic Forum on Thursday.

Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim took part in a panel discussion on how the MENA region can build an inclusive and sustainable economic future for all of its nations.

He said the Kingdom’s economy was beginning to see results from its Vision 2030 agenda, which led to its economy being one of the fastest growing in the world in 2022.

“Our non-oil activities, the private sector essentially, has grown at a very high rate up until the end of Q3. On a cumulative basis it reached 5.9 percent and before that in Q2 it was even higher. That is one of the highest, if not the highest, rates in 11 years,” he said.

“We will continue our plans to diversify the economy. We were very fortunate that we have seen results of Vision 2030 materialize over the last few years, especially in 2022, and Saudi becoming the global growth story.”

That private sector growth, coupled with an increase in foreign direct investment in new and revived sectors like tourism, culture, sport and entertainment, and mining, were set to deliver long-term prosperity to Saudi Arabia, Alibrahim said.

“We have a very strong fiscal position, a very strong and resilient financial system and a monetary system as well, so we continuously assess if this will impact the private sector, which has been growing consistently and we’ve seen even foreign direct investment grow at 250 percent,” he said.

“The private sector in terms of exports has grown around 20 percent and manufacturing has grown more than 20 percent in the last year.”

Alibrahim said the government’s efforts to make the Kingdom an attractive proposition for foreign direct investment would lead to a “co-creation of value” with its partners.

“We started at 0.7 percent (FDI) and we’re still moving forward. We want to move faster but with the introduction of the National Investment Strategy and with the many trillions that are targeted to be attracted, we’re moving forward,” he said.

“We are trying to build the right business environment in terms of transparency, policy predictability an institutional environment that never existed this well before to attract this FDI.”

Egypt’s Minister of Planning and Economic Development Hala El-Said and Bahrain’s Minister of Sustainable Development Noor Ali Al-Khulaif echoed Alibrahim’s optimism for the region’s economies as they diversify and attract investment, with both highlighting the progress made in their own countries.

But the panelists warned against the threat to growth from looming crises, with geopolitical upheaval and inflation being the most concerning. They also highlighted the need for keeping channels of communication and cooperation open between nations in the region.

“Inflation is one of the things that is a worry not only for Egypt but for all countries … because it is an extra cost on prices to any citizen,” El-Said said.

Al-Khulaif said: “Certainly, the geopolitical situation (is concerning) … but touching on the theme of WEF this year, communication, I’ve seen it a lot this week … this understanding that my own stability and prosperity, really depends on the stability and prosperity of the countries around me.”

“I think there is a huge amount of willingness to communicate and work together toward growth,” she said.

SOurce:https://www.arabnews.com/node/2235626/business-economy

Saudi Arabia issues 115 permits for new industrial units with $1bn investments

Scion Industrial Engineering

Saudi Arabia’s Ministry of Industry and Mineral Resources issued 115 industrial licenses with investments worth SR4 billion ($1.06 billion) in August 2022, official data showed.

The data from the ministry revealed that the number of industrial units across the Kingdom reached 10,707, up from 10,685 in July 2022.

In August 2021, the number of industrial facilities across Saudi Arabia was 10,159.

According to the data, 68 factories became operational in August 2022, with an investment volume of SR2.3 billion.

Forty-one licenses were issued to industrial units in the Riyadh region followed by 26 in the Eastern Province and 22 in the Makkah region.

In the Madinah region, eight new factory licenses were issued in August, and it was followed by the Qassim region with seven, four in Asir, three each in Tabuk and Hail regions and one license for a factory in the Jazan region.

SOurce:https://www.arabnews.com/node/2169806/business-economy

Technology-based pension reforms needed in Middle East, expert says

Reforms are needed to rapidly modernize pension schemes in the Middle East to reflect the region’s demographics using technology pension products that are modern, contemporary, engaging and efficient to run, according to a UK-based expert.

There are a number of “themes” that flow through pensions within the region, according to Tim Phillips, managing director of Middle East and Asia affairs at Smart — a UK-based finTech company specialized in building technology for pension schemes around the world.

“When you have a number of dynamics — such as people living considerably longer — (they combine) to cause what is referred to as a ‘pensions crisis,’” he told Arab News in an exclusive interview.

Phillips said life expectancy has increased significantly over the last 20 years and continues to do so, with people having fewer children than they used to in previous generations, which results in an aging population.

A large percentage of the workforce in the Middle East has no social insurance umbrella and the size of the working-age population in Arab countries has decreased significantly in the last decade, according to the World Bank, with projections it will fall by more than one-quarter by 2060.

“The percentage of people who are in retirement versus in employment is increasing quite significantly, so that naturally causes quite an issue, because the amount of funding that you need to support the people in retirement has to get drastically higher,” Phillips said.

There are two types of pension provision in the region, he explained; public pension funds, which provide pensions for locals, and are “incredibly generous” and well run in some countries. Expatriate workers tend to receive a “gratuity” or “lump sum” when they leave employment.

“Both of those models are areas where there’s been discussion about reform happening (and) both of those models need to be looked at to reform in some way, and it’s happening around the world, it’s not just in the Middle East,” Phillips said.

Governments and public pension funds across the region are starting to think about how they need to adapt and modernize to provide better systems for workers, and are looking to learn from successful savings reforms implemented in the UK, Australia and Hong Kong.

Phillips, who is also the vice president of the British Pensions Management Institute, stressed that the region is diverse, not just demographically, and that each country needs to be looked at separately.

“In Egypt, I think something like 60 percent of the population is unbanked, so that becomes a completely different challenge to somewhere like the UAE, where everyone’s a lot more familiar with using their mobile apps to do banking,” he said.

Lebanon has a number of issues, not least of which is the significant depreciation of the currency, which is going to cause difficulties across all financial assets that are held in that currency, he added.

Kuwait has one of the largest public pension funds in the world, and in Saudi Arabia and the UAE there is a growing interest in moving toward the defined-contribution model — a pot based on how much is paid in, which is the trend throughout the West, as well as countries like Hong Kong and Singapore, as opposed to the defined benefit model that is based on your salary and period of employment.

Saudi Arabia’s Vision 2030 is a good example, Phillips said, as it has set specific targets to achieve in the next few years, including to increase household savings from 6 percent to 10 percent of total household income, which would exceed the target set in the UK.

“I think targets like that are fantastic and that’s where I see the journey going for somewhere like the Kingdom of Saudi Arabia over that period and, hopefully, in advance to 2030. And I know a lot of companies will want to support that.

“But ultimately, if you have any large program in which you want to be funding a significant retirement income for a large population of people, you’re not going to be able to do that without some sort of technology being at the center of that, it’s not going to be something you can do manually, which may have been (the case) in the past,” Phillips said.

“So the underlying issue, irrespective of demographic changes or differences, is that people need to have an adequate income for their retirement, because if they don’t, in the long run, the state will face a high level of poverty.”

The pension market is very large, he added, but it has been underserved by technology disruptors as it’s “seen as a not very attractive place to go and innovate,” as opposed to creating another challenger bank.

There’s been quite a lot of competition in the banking industry, with complaints that it is “tired and needs disruption,” but “there hasn’t been as much in the pension space, and that’s where Smart has specialized,” Phillips said.

The Middle East is particularly exposed because of its relative lack of occupational pensions provided by employers, or social security provision provided by the state, so people therefore rely on the third pillar, which is personal savings.

“That’s traditionally not been hugely successful, because as people we’re hardwired to not be able to see dangers and risks that are far in the future, so it becomes a bit challenging to solve the pensions crisis by addressing that third pillar, and this is where we see interest in our technology coming.”

Source:https://www.arabnews.com/node/2236651/business-economy

Jordanian industrial delegation begins visit to Saudi Arabia

Scion Industrial Engineering

Jordan and Saudi Arabia will discuss ways to expand economic relations and build joint industrial partnerships during a Jordanian delegation’s visit that started on Saturday.

The delegation, led by Amman Chamber of Industry chief Fathi Jaghbir, includes representatives of industrial companies operating in a range of production sectors.
The visit has been organized by the ACI, and will include Jeddah, Makkah and Madinah, Jordan’s News Agency reported on Saturday.

In a statement, the ACI said that the delegation’s weeklong visit will include the Makkah Expo for Hotels and Restaurants, which is due to open on Tuesday.

Jaghbir highlighted the importance of strengthening Jordanian-Saudi economic relations and increasing trade exchanges, which totalled $4.2 billion in 2021, in light of the “distinguished, brotherly” bilateral relations in various fields.

“The visit comes as a continuation of the previous successful visit last year, which saw joint business meetings with Saudi businesspeople in Riyadh, Jeddah, Dammam and Makkah, during which memoranda of understanding and cooperation were signed between Jordan and Amman chambers of industry and commerce chambers in these Saudi cities.”

He praised the Jordanian Embassy in Riyadh, the Federation of Saudi Chambers, and heads of commerce chambers in Jeddah, Makkah and Madinah for facilitating the visit.

SOurce:https://www.arabnews.com/node/2236486/business-economy

EAD uses drones to plant one million mangrove seeds in Abu Dhabi

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In a remarkable environmental initiative, the Environment Agency – Abu Dhabi (EAD) has shown how modern technology can be used for the greater good when it planted nearly one million mangrove seeds…using drones.

This is part of EAD’s plans to work with local, regional and international partners, and establish Abu Dhabi as a global hub for research and innovation in support of the conservation of mangroves and focuses on the importance of mangroves for carbon sequestration to combat climate change.

This is part of the first phase of a project supporting the Abu Dhabi Mangrove Initiative, which was announced in February 2021. The UAE Ministry of Climate Change and Environment has a nationwide target to plant 100 million mangroves by 2030.

EAD is the first organisation to utilise drones and plant mangroves at a large-scale utilising ecological principles. The planting of one million seeds follows a successful initial phase implemented by EAD in partnership with ENGIE, the global energy company, and Distant Imagery, a drone engineering solutions company.

This initial phase focused on planting mangroves via drone in 2020 and had a 48 percent success rate. EAD then scaled up the project, with one million mangroves planted via drones at different locations around Al Mirfa, in Al Dhafra Region.

Dr Shaikha Salem Al Dhaheri, Secretary General of EAD, commented: “Despite the fact that the world’s mangroves are declining due to natural and human challenges they are facing, Abu Dhabi has a different story to tell as the plantation of mangroves has continued in the UAE at large and in Abu Dhabi in particular, in a slow but steady manner.

“A prime example is our latest project of planting one million mangrove seeds via innovative drone technology. This project is one of a number of programmes run by the Abu Dhabi Mangrove Initiative in support to the UAE’s pledge to plant 100 million mangroves in 2030.

“The success rate for this year’s planting looks great so far and based on the data, we will do a refilling of areas. This project is a continuation of our efforts to mitigate the disastrous effects of climate change as mangroves have proven to be very efficient at carbon sequestration, thus reducing the levels of carbon dioxide entering the atmosphere.”

The use of drones has several advantages. The environmental footprint of the methodology is low as it removes the need of intense labour, and the need of sapling transportation. It is also cost-effective as it reduces the overall price of mangrove planting, eliminates the need of mangrove nurseries and associated costs, and facilitates reaching remote and difficult areas.

The EAD has been evolving not only its methodology for seed germination and site planting patterns with each round, but also seed dispersal mechanisms and drones so that they can fly longer. The drone is self-designed and engineered to drop seedlings from the air, monitor the growth of mangrove saplings, map the habitat and create 3D imaging.

Mangrove plantation was a personal passion of the late Sheikh Zayed Bin Sultan Al Nahyan, Founder of the UAE. Dr Al Dhaheri pointed out how he commenced plantation along the coasts of the islands and mainland using the knowledge of local communities and his foresight.

Source:https://www.arabianbusiness.com/culture-society/ead-uses-drones-to-plant-one-million-mangrove-seeds-in-abu-dhabi

Saudi’s Red Sea floating pod hotel

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Following announcements of 13 international hotels opening in Saudi Arabia’s mega-project The Red Sea, a new futuristic resort has been announced to open in 2024. The Sheybarah Resort is a ‘hyper-luxury’ hotel located in Sheybarah Island, designed by Dubai-based architectural firm Killa Design.

The first batch of 73 prefabricated villas was delivered at the Red Sea project site, John Pagano, CEO of Red Sea Global revealed.

“Welcoming the future of tourism to #SaudiArabia. Designed by @killadesign, built off-site by Grankraft, and transported from the UAE to Saudi Arabia by @MammoetGlobal, these space-age orbs are the first batch of 73 overwater villas for our iconic Sheybarah resort at #TheRedSea” the tweet said.

The goal of the project is to preserve and enhance biodiversity in the habitat, which is home to dense mangroves, desert flora, coral flats, sea grass, coral reefs and an array of species of birds, fish and marine animals.

Alongside bio-preservation, the luxury resort aims to attract visitors from around the world and rebrand the Kingdom as a marine eco-tourism destination.

To minimise environmental footprint, the resort was designed in a way where the ‘pods’ are cantilevered above the coral reefs with minimal ground impact at the base of the supporting column.

The pod being aerially placed seems to “defy gravity and suspends the guest directly above and within the beauty of an untouched marine eco-system,” this results in an observational platform for visitors to observe the species that live in the area.

The project is powered by a central solar farm, the water supplied is also from a solar powered desalination plant.

The way guests have to commute to the location is through a seaplane, from the arrival pier they will be shuttled by driverless buggies to the inner lagoon.

Features at the futuristic luxury resort includes a spa, pool, fitness facility, sports courts, diving and snorkelling centre, a boardwalk and more.

The pods are uniquely designed with highly reflective stainless-steel exteriors polished to a mirror finish. “These reflective orbs float, almost imperceptible, reflecting the colours and surface patterns of the ocean, the intense colours of the sky as they change throughout the day,” the website describes. The reflective design not only offers visual appeal but has 100 percent energy performance due to its reflections of solar grain.

Interiors of the pods are inspired by a luxury yacht design with panoramic views, sliding doors that open to a deck, a seating area and an infinity pool.

Killa Design is also behind some iconic projects in Dubai including the Museum of the Future, Address Beach Resort, Office of the Future, City Walk and more.

Source:https://www.arabianbusiness.com/industries/travel-hospitality/revealed-saudis-red-sea-floating-pod-hotel

UAE’s new law for virtual assets sector to trigger mass entry of global companies

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The UAE is poised to emerge as the first choice for global companies in the digital asset business for their global expansion, following the Gulf country approving a new regulation to govern virtual assets in the country, sector experts said.

The new regulatory framework is also expected to fuel the mainstream adoption of blockchain applications for economic growth in the region.

Several global and regional companies in the blockchain, crypto and NFT (non-fungible token) segments are hurriedly finalising plans to enter or expand their operations in the country in the next few months, industry insiders said.

The UAE Cabinet this week introduced a new regulation and an independent regulatory authority for virtual assets and virtual asset service providers – a move which marks the state’s first regulatory regime for the sector at the federal level.

The Dubai Virtual Asset Regulation Law and the Dubai Virtual Assets Regulatory Authority (VARA) would oversee the growth of the virtual asset business environment including regulation, governance and licensing.

The new regulation is expected to come into effect on 15 January 2023.

“We are delighted to see the UAE moving towards a more mature regulatory framework for the digital asset industry. The advanced regulations at the federal level will make UAE the first choice for global companies in the digital asset business for their global expansion,” Mahin Gupta, founder of Liminal, a Singapore-based digital wallet infrastructure platform with operations in UAE, told Arabian Business.

The latest regulatory framework will facilitate the efforts of the authorities to create a compliant and progressive regime in the UAE for global crypto companies to build compliant blockchain applications to fuel mainstream adoption and economic growth in the region,” Gupta said.

Gupta also revealed the company’s plans for an aggressive expansion in the UAE in the wake of the latest government moves to further develop the sector.

“At Liminal, we are constantly working towards strengthening our presence in the UAE and adjourning areas through like-minded partners. We will now explore UAE as a market with huge business potential for technology-led secure services in the field of crypto and blockchain [following the new regulatory environment]” he said.

Industry experts said UAE authorities’ decision to establish a new regulatory environment for the sector assumes added significance in view of the recent global upheaval in the industry following the FTX collapse and will encourage more companies to set up base in the UAE.

“The new federal regulation provides more clarity to the sector and visibility around how the federal and local – ADGM and DIFC – regulations interact with each other,” Padmini Gupta, co-founder and chief executive officer of Xare, a Dubai-based fintech, told Arabian Business.

“This will encourage more companies and founders to choose the UAE as their base in building the future of digital assets and metaverse,” Gupta said.

The latest data released by the Dubai Multi Commodities Centre (DMCC) shows out of 3,049 new businesses registered in Dubai in 2022, more than 500 businesses were crypto startups.

“The data speaks volumes about Dubai, emerging as a global hub for crypto-related products and services,” Mahin Gupta said.

The new UAE regulatory framework is designed to both protect investors and supervise the industry, apparently having recognised the perceived risks posed to investors in virtual assets.

The UAE Cabinet also said that the regulation would support the efforts of the state to provide an attractive investment economic and financial environment for international companies and institutions operating in the virtual assets sector to provide their services in the state.

The businesses that fall under the purview of the new law include cryptocurrency exchanges, businesses facilitating cryptocurrency transfers and the like.

However, the government-owned DIFC financial-free zone will reportedly be exempted from this regulation. This is because the Dubai Financial Services Authority (DFSA) is developing its regulations for the virtual asset market to be applied in DIFC.

Source:https://www.arabianbusiness.com/industries/technology/uaes-new-law-for-virtual-assets-sector-to-trigger-mass-entry-of-global-companies

UAE-Bahrain non-oil trade hits $6.5bn

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UAE and Bahrain’s non-oil trade exchange increased by more than 92 percent in the past decade.

In 2022 non-oil trade exchange between the two nations totaled $6.5bn (AED23.7bn) compared to $3.3bn (AED12.3bn) in 2012, according to recent data issued by the Federal Competitiveness and Statistics Centre (FCSC).

Their total non-oil trade exchange during the same period also amounted to $51.2bn (AED188bn), with imports accounting for $21.8bn (AED77.4bn), exports for $10.3bn (AED37.8bn), and re-exports for $20bn (AED72.8bn) while the value of their non-oil bilateral trade at the end of the third quarter of this year totalled $4.9bn (AED17.9bn), compared to $4.5bn (AED16.5bn) for the same period in 2021, an increase of 8 percent.

UAE-Bahrain trade
2019 was ranked first in terms of volume of bilateral trade between the two countries over ten years, with a value of $7.8bn (AED28.7bn), and 2018 came in second place, with their non-oil trade amounting to $7.8bn (AED28.3bn).

The central banks of the UAE and Bahrain this week increased their interest rates following the US Federal Reserve Board’s announcement.

Source:https://www.arabianbusiness.com/politics-economics/uae-bahrain-non-oil-trade-hits-6-5bn

Egypt says it is not at risk of bankruptcy

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Egypt’s government has rejected claims that the country is exposed to bankruptcy risk due to its debts and the cost of servicing them during rate rises and inflation.

It also cited a report on the performance of the Egyptian economy from June to November.
The Cabinet said Egypt’s ratio of external debt to GDP was 34.1 percent, below the maximum risk limit of 50 percent.

The report said the structure and diversity of Egypt’s external debt instruments including loans, deposits, issued bonds and short-term credit facilities, were positive.

The Cabinet said that most of Egypt’s external debt was medium and long-term. Around two-thirds of foreign debt was also at fixed interest rates — which mitigates the risks of international rate increases.

It added: “In light of the successive economic crises that the world witnessed during the previous periods, governments all over the world tended to adopt expansionary economic policies to mitigate the consequences of the negative effects of these economic crises on families and companies.

“Such policies led to a significant rise in levels of global indebtedness, which rose to a record 350 percent of the global GDP by the end of the second quarter of 2022.”

The Cabinet added that Egypt aimed to maintain fiscal discipline, reduce the budget deficit to 5.6 percent of GDP, and achieve the first surplus from the state’s general budget permanently at 0.2 percent of the GDP.

These measures would contribute to reducing indebtedness and achieving financial and economic stability for the country’s general budget and ensure safety for current and future generations, said the statement.

The Cabinet statement came as Egypt’s Central Agency for Public Mobilization and Statistics announced on Thursday that the general index of consumer prices rose by 2.5 percent to 140.7 points in November.

The annual inflation rate in November rose to 19.2 percent, compared to 16.3 percent in October, said an agency statement.
The annual inflation rate in urban areas rose during November to 18.7 percent, compared to 16.2 percent in October.
The agency’s statement attributed the rise to prices increase for bread and grain by 52.1 percent, meat and poultry by 30.3 percent, fish and seafood by 38 percent, dairy products and eggs by 40 percent, and coffee and tea by 23.1 percent.

It also cited price increases in tobacco products by 0.3 percent, clothing by 2.1 percent, footwear by 1.3 percent, home furnishings by 2.6 percent, and appliances by 3.1 percent.

Source:https://www.arabnews.com/node/2213166/middle-east