Aurelia Butler

DUBAI (Reuters) – The World Bank expects Saudi Arabia’s economy to contract by 0.9% in 2023, it said in a report on Thursday, revising its growth forecast for the world’s top oil exporter sharply lower on the back of production cuts and lower prices.Overall growth in the Middle East and North Africa (MENA) region is also expected to slow, now forecast at 1.9% in 2023, down from 6% last year and lower than the 3% the World Bank forecast in April.Saudi Arabia, the Arab world’s largest economy, has cut its oil production in a preemptive move it says is intended to stabilise the oil market. Oil prices remain below last year’s average of $100 a barrel.The Saudi government expects GDP growth to slow to 0.03% in 2023, from 8.7% last year, according to revised forecasts released by the finance ministry last week, narrowly avoiding a contraction.The World Bank’s latest economic update, released on Thursday, attributed the “abrupt decrease” in Saudi economic activity to “lower oil production levels amidst subdued prices.” It had forecast Saudi GDP growth at 2.9% in 2023 in its April update.Growth for the six-member Gulf Cooperation Council (GCC) of oil and gas exporters is expected to decelerate to 1% in 2023, down from 7.3% last year, and sharply below the 3.2% forecast in the World Bank’s April update. It is expected to rebound to 3.6% in 2024.MENA economies vary widely between the wealthy GCC, developing oil importers such as Jordan, and developing oil exporters such as Iraq.But prolonged oil production cuts this year have balanced out the playing field somewhat. Growth among the region’s oil importers is projected at 3.6% this year, down from 4.9% in 2022.”This divergence is projected to close in 2023 and 2024, bringing the tale of two MENAs to a halt,” according to the World Bank MENA Economic Update.The World Bank sees MENA GDP per capita growth, a proxy for living standards, slowing to 0.4% in 2023 from 4.3% last year, raising concerns about prospects for future employment among the region’s young population.“Without proper policy reforms, we could inadvertently worsen the enduring structural challenges faced by MENA’s labor markets as far as the eye can see. The time for reform is now,” Ferid Belhaj, the World Bank’s vice president for the region, said.The GCC is now expected to post a fiscal surplus of 0.8% of GDP in 2023, down from 4.3% in 2022, and lower than the 3.2% projected in April. More

MARRAKECH, Morocco (Reuters) – Moroccans living just an hour from where the global financial elite will gather for IMF and World Bank meetings next week are homeless and destitute after last month’s deadly earthquake, camping amid the rubble of their devastated villages.Near the conference venue in the city of Marrakech, where quake damage was less severe, the old city wall has already been repaired, a fallen minaret has been covered up, rubble has been removed, lawns trimmed and flowers planted.But in the High Atlas (NYSE:ATCO) mountains where most of the quake’s 3,000 victims were killed, villagers live in tents with little access to showers or working toilets, surviving on state handouts while they try to resurrect their shattered lives. The vivid contrast reflects inequalities that already defined a country that has some of Africa’s most advanced infrastructure and industry, but where many of the rural poor live without basic services including sewage systems. A single night in a twin bedroom at Marrakech’s historic La Mamounia hotel during the IMF meeting was advertised this week at 20,000 Moroccan dirhams ($1,900). Average annual GDP per capita among people living in this region is only about $2,000. When the quake struck remote Imi N’Tala “it was like a bomb” said Omar Ait Ougadir, who lost his two sons Khaled, 14, and Taoufiq, 10, in the disaster, among a total of 84 killed in their village. Ait Ougadir’s wife and daughter survived. “I don’t know what we’ll do when it snows,” he lamented, as he collected wood from fallen houses to build a hut next to the yellow tent among the trees outside the village where they swelter by day and freeze at night.Most houses in Imi N’Tala were either destroyed or badly damaged, with a landslide blocking the only road for a week. The villagers must share four toilet cubicles that were still unconnected to the water supply when Reuters visited this week. Authorities have promised compensation for quake victims including a monthly stipend of $250 per household and thousands of dollars to rebuild fallen homes. They have distributed tents and blankets, set up field hospitals and are removing rubble. The government plans to invest $12 billion in reconstruction and infrastructure over five years in the quake-ravaged region. The IMF last week approved a $1.32 billion loan, requested before the quake, to guard against climate-related disasters. TOURISM RETURNMore than 10,000 people are expected to attend the IMF and World Bank meeting at the direct request of Morocco’s government, and fund spokesperson Julie Kozack said Rabat had given assurances the conference would not disrupt relief work. The annual meeting had been scheduled to take place in Marrakech since long before the earthquake and is expected to address global issues including debt relief for poorer countries and economic fallout from friction between the U.S. and China. The meeting is now seen as important for drawing back tourists to Morocco, supporting a sector that is crucial for picturesque Marrakech and the surrounding areas that were hit by the quake. At the city’s famous Jemaa al-Fna square, where locals and tourists crowd past street entertainers and market stalls, juice maker Hamid Ben Addi said he hoped the meetings would help bring back visitors. “Business was a bit sluggish but now thank God normal life is gradually resuming,” he said. About 50 kilometres (31 miles) south of Marrakech, normal life is also gradually returning to the town of Amizmiz, with cafes and restaurants serving customers in damaged buildings although debris still sometimes falls from roofs and ceilings.Issam Mazgouti lives in one of the hundreds of tents dotted around the town with his wife and six children after their home collapsed. He said the biggest problem that quake survivors currently face is sanitation – a problem also voiced by Ait Ougadir in the village of Imi N’Tala, who said he had only been able to shower once since the earthquake. Mazgouti said his family was one of about 100 households that had to share two toilet cabins and a single tap of water.”Men go outside, leaving the two toilets for the women, who have to suffer very long queues day and night,” he said. More

The Geneva-based trade body said on Thursday merchandise trade volumes would increase by just 0.8% in 2023, compared with its April estimate of 1.7%.For 2024, it said goods trade growth would pick up to 3.3%, a forecast virtually unchanged from its April estimate of 3.2%.The WTO said the trade slowdown was broad-based, involving a larger number of countries and goods, though particularly iron and steel, office and telecoms equipment, textiles and clothing.Cars were a notable exception, with surging sales this year.The WTO said risks to its forecast were balanced. A sharper than expected slowdown in China and resurgent inflation, keeping interest rates higher for longer, were potential negatives. However, a rapid easing of inflation could raise the forecast.The 164-member trade body repeated its warning that it saw some signs of trade fragmentation linked to global tensions, but no evidence of a broader de-globalisation that could threaten its 2024 forecast.One sign was that the share of intermediate goods in world trade, an indicator of global supply chain activity, fell to 48.5% in the first half of 2023, compared to an average of 51.0% over the previous three years. The WTO said it was not clear if the decline was due to geopolitical tensions or the general economic slowdown.”The data suggest that goods continue to be produced through complex supply chains, but that the extent of these chains may have reached their high-water mark,” the WTO said.WTO Director-General Ngozi Okonjo-Iweala said the expected slowdown of trade was a cause for concern because it could depress the living standards of people around the world, particularly in poor countries.”Global economic fragmentation would only make these challenges worse,” she saidThe WTO’s forecast does not cover services, but the WTO said growth was moderating after a strong rebound in international tourism in 2022. Global commercial services trade rose 9% in the first quarter of 2023, down from 19% in the second quarter of 2022, the WTO said. More

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The Wall Street brokerages raised their forecast for gross domestic product growth to 5%, in line with China’s target rate for 2023, and said the slowdown in the world’s second largest economy has ‘hit a bottom”. Policy momentum since August end has exceeded expectations, Citi economists said in a note, citing a cut in personal incometax, as property prices ease in Tier-1 cities and home loans get repriced. The brokerage expects retail sales to improve and industrial production to hold steady following a rebound in factory activity.The upbeat view is a shift from its previous stance in August where it cited disappointing policy support and worries of contagion from the property crisis to cut its forecast for full-year growth to 4.7%.”Further policy measures could be announced such as product-specific consumption support and further relaxation of administrative controls in the housing market,” JPM economist Haibin Zhu said.”We would also watch out for a policy scheme (debt swap or debt restructuring) to deal with local government hidden debt.”Zhu said policy measures to support the surviving private developers could also be introduced. More