Evelyn Reynolds

Economists misjudged how much staying power inflation would have. Next year could be better — but there’s ample room for humility.At this time last year, economists were predicting that inflation would swiftly fade in 2022 as supply chain issues cleared, consumers shifted from goods to services spending and pandemic relief waned. They are now forecasting the same thing for 2023, citing many of the same reasons.But as consumers know, predictions of a big inflation moderation this year were wrong. While price increases have started to slow slightly, they are still hovering near four-decade highs. Economists expect fresh data scheduled for release on Tuesday to show that the Consumer Price Index climbed by 7.3 percent in the year through November. That raises the question: Should America believe this round of inflation optimism?“There is better reason to believe that inflation will fall this year than last year,” said Jason Furman, an economist from Harvard who was skeptical of last year’s forecasts for a quick return to normal. Still, “if you pocket all the good news and ignore the countervailing bad news, that’s a mistake.”Economists are slightly less optimistic than last year.Economists see inflation fading notably in the months ahead, but after a year of foiled expectations, they aren’t penciling in quite as drastic a decline as they were last December.The Fed officially targets the Personal Consumption Expenditures index, which is related to the consumer price measure. Officials particularly watch a version of the number that illustrates underlying inflation trends by stripping out volatile food and fuel prices — so those forecasts give the best snapshot of what experts are anticipating.Last year, economists surveyed by Bloomberg expected that so-called core index to fall to 2.5 percent by the end of 2022. Instead, it is running at 5 percent, twice that pace.This year, forecasters expect inflation to fade to 3 percent by the end of 2023.The Federal Reserve’s predictions have followed a similar pattern. As of last December, central bankers expected core inflation to end 2022 at 2.7 percent. Their September projections showed price increases easing to 3.1 percent by the end of next year. Fed officials will release a new set of inflation forecasts for 2023 on Wednesday following their December policy meeting.Supply chains are healing.A worker at a garment factory in Vernon, Calif.Mark Abramson for The New York TimesOne reason to think that the anticipated but elusive inflation slowdown will finally show up in 2023 ties back to supply chains.At this time last year, economists were hopeful that snarls in global shipping and manufacturing would soon clear; consumer spending would shift away from goods and back to services; and the combination would allow supply and demand to come back into balance, slowing price increases on everything from cars to couches. That has happened, but only gradually. It has also taken longer to translate into lower consumer prices than some economists had expected.Inflation F.A.Q.Card 1 of 5What is inflation? More

Shoppers carry bags of purchased merchandise at the King of Prussia Mall on December 11, 2022 in King of Prussia, Pennsylvania.
Mark Makela | Getty Images

Consumers grew more optimistic about inflation in November amid expectations that both food and energy price increases would be less severe in the coming year, according to a New York Federal Reserve survey released Monday.
The central bank’s Survey of Consumer Expectations indicated that respondents see one-year inflation running at a 5.2% pace, down 0.7 percentage point from the October reading.

That’s the lowest level for that reading since August 2021 — the early days of the inflation surge that has gripped the economy and pushed the Fed into a series of aggressive interest rate hikes that is likely to continue this week. The most recent annual inflation rate as gauged by the consumer price index was 7.7% in October.
In addition to the brightened short-term outlook, the inflation-rate projection for three years from now edged lower to 3%, down 0.1 percentage point from the previous month. A relatively new data series reflecting the five-year outlook declined by the same level, to 2.3%.

The survey comes as Fed officials have indicated the likelihood of a 0.5 percentage point interest rate hike coming this week when policymakers conclude their two-day meeting Wednesday. If that happens, it would be the seventh rate increase of the year, taking the Fed’s benchmark short-term borrowing rate to a targeted range between 4.25%-4.5%, the highest in 15 years.
However, the inflation news has gotten at least modestly better in recent days, a trend that would be reflected in post-meeting communications from the rate-setting Federal Open Market Committee and Chairman Jerome Powell.
Respondents to the New York Fed survey said they see gas prices rising 4.7% and food up 8.3% in the year ahead. While those increases are still not consistent with an economy where inflation is running at the Fed’s 2% target rate, they are respective decreases of 0.6 percentage point and 0.8 percentage point from the previous month.

The survey also indicated that wages are expected to grow 2.8% for the 12-month period, a 0.2 percentage point monthly decline and tied for the lowest level also going back to August 2021.
However, household income is projected to grow 4.5%, with the 0.2 percentage point monthly increase taking the outlook to its highest level ever in a data series that goes back to June 2013.
The unemployment outlook actually brightened, with 42.2% of respondents saying they think the jobless rate will be higher a year from now. The 0.7 percentage point decline came even though Fed officials have said they expect their efforts to slow the economy will hurt the labor market, which currently boasts a 3.7% unemployment rate.
Also, worker expectations of being able to find a job in case of losing their current position rose to 58.2%, the highest level since February 2020, just before the Covid pandemic hit in full force.
The next key inflation reading comes Tuesday with the Labor Department’s consumer price index for November. Economists surveyed by Dow Jones expect the report to show a 0.2% monthly increase and a 7.3% annual rise. Excluding food and energy, the respective forecasts for core CPI are for 0.4% and 6.1%.

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The result, at a plant owned by General Motors and a South Korean company, is a milestone for the auto union in organizing electric vehicle workers.In an early test of President Biden’s promise that the transition to electric vehicles will create high-paying union jobs, employees at a battery plant in eastern Ohio have voted to join the United Automobile Workers union.The outcome appears to create the first formal union at a major U.S. electric car, truck or battery cell manufacturing plant not owned entirely by one of the Big Three automakers. The factory, known as Ultium Cells, is a joint venture of General Motors and the South Korean manufacturer LG Energy Solution.A union statement early Friday said the result was 710 to 16 in two days of balloting.“As the auto industry transitions to electric vehicles, new workers entering the auto sector at plants like Ultium are thinking about their value and worth,” said Ray Curry, the U.A.W. president, in the statement. “This vote shows that they want to be a part of maintaining the high standards and wages that U.A.W. members have built in the auto industry.”The National Labor Relations Board said it had received the tally and would move to certify the result if no objections were filed.Mr. Biden issued a statement after the vote saluting the Ultium workers and declaring, “In my administration, American and union workers can and will lead the world in manufacturing once again.”While existing plants owned by the three legacy U.S. automakers have maintained a union presence as they have shifted production to electric vehicles, the union must start from scratch at plants like the one in Ohio and joint ventures through which Ford Motor is building battery factories in the South. Other electric vehicle companies, like Tesla, Rivian and Lucid, are also not unionized.The autoworkers union has long worried about the transition to electric vehicles, first noting in a 2018 research paper that electric vehicles require about 30 percent less labor to produce than internal combustion vehicles. The paper also pointed out that the United States was falling far behind Asian and European countries in establishing an electric vehicle supply chain.Read More on Electric VehiclesGoing Mainstream: U.S. sales of battery-powered cars jumped 70 percent in the first nine months of the year, as non-affluent buyers are choosing electric vehicles to save money on gas.A Bonanza for Red States: No Republican in Congress voted for the Inflation Reduction Act. But their states will greatly benefit from the investments in electric vehicles spurred by the law.Rivian Recall: The electric-car maker said that it was recalling 13,000 vehicles after identifying an issue that could affect drivers’ ability to steer some of its vehicles.China’s Thriving Market: More electric cars will be sold in the country this year than in the rest of the world combined, as its domestic market accelerates ahead of the global competition.A report last year by the Economic Policy Institute, a liberal think tank, estimated that the transition to electric vehicles could cost at least 75,000 U.S. auto industry jobs by 2030 if the government did not provide additional subsidies for domestic production, but could create 150,000 jobs if those subsidies were forthcoming.An ambitious climate and health care bill signed by Mr. Biden in August provided tens of billions of dollars in subsidies for the industry, raising the probability that auto industry jobs will be created rather than lost.But while Congress included certain incentives for union-scale wages in the construction of new plants, it ultimately removed elements of the legislation that would have helped ensure the creation of union jobs, such as a $4,500 incentive for vehicles assembled at a unionized facility in the United States.Josh Bivens, an author of the Economic Policy Institute report, said in an interview that he was pleasantly surprised that the administration managed to pass strong incentives for domestic production of electric vehicles. But whether the incentives will lead to good jobs, he added, is an open question.“There’s no real explicit subsidy or incentive to make these unionized or even high-wage,” Mr. Bivens said.Under the union’s contract with the Big Three automakers, veteran rank-and-file production workers make about $32 per hour. New hires start at a substantially lower wage and work their way up to that amount over several years.By contrast, companies that make electric vehicles or their components typically pay workers hourly wages in the midteens to the mid-20s.The union campaign at the Ohio plant was one of the easier tests facing U.A.W. organizers at electric vehicle facilities. The plant is in Warren, within a mile or two of a unionized General Motors facility in Lordstown that operated for decades before the company idled it and then sold it in 2019, making local residents familiar with the benefits of union membership.And while Ultium did not agree to a so-called card check process that could have bypassed a union election, it also did not wage a campaign seeking to dissuade workers from unionizing, according to a U.A.W. spokeswoman. Mary T. Barra, the General Motors chief executive, said in an interview on Bloomberg Television last week that the company was “very supportive” of the plant’s unionization.It is less clear how successful the union will be at organizing other new electric vehicle plants, such as an Ultium facility being built in Tennessee or three factories being built jointly by Ford and the South Korean battery maker SK Innovation in Kentucky and Tennessee, where the political culture is less hospitable to unions. Battery packs, which can cost around $15,000, are by far the most expensive component of an electric vehicle powertrain, the key parts and systems that power a car.The task may be even taller at plants owned solely by foreign manufacturers, such as an SK battery plant in Georgia or a huge plant that Hyundai is building in the state. The union has for decades struggled to organize so-called transplant facilities owned by foreign automakers in the South.Workers at the Ultium plant in Ohio, which began production this year, cited pay and safety issues as key reasons for unionizing. Dominic Giovannone, who helps fabricate battery cells, said he was now making about $16.50 per hour — a roughly $8 pay cut from his job at a plastic bag factory. He said the Ultium job attracted him because the plant was far closer to his home than his previous job had been.An Ultium spokeswoman said that hourly pay for rank-and-file workers ranged from $15 to $22 depending on experience and skills, and that the company paid a quarterly bonus and provided benefits as soon as employment began.Mr. Giovannone said that while the health care benefits were “phenomenal,” he wished the 401(k) match were more generous. He also said workers in his department were frequently required to handle harsh chemicals without enough information from the company to ensure that they did so safely.The lack of specific guidance on chemicals “is a big concern in the plant,” he said, adding that supervisors had not been very responsive when he and his co-workers prodded them on the issue.Ethan Surgenavic, a heating, ventilation and air-conditioning specialist at the plant, whose department is responsible for indoor conditions such as keeping humidity extremely low around certain components, said he, too, had taken a large pay cut to work there. He now makes $29 per hour, down from about $42, but he said the job also substantially reduced his commute.He agreed that the health benefits were strong but shared Mr. Giovannone’s concerns about safety. Mr. Surgenavic said that when workers raise questions about safety rules, “it feels like it lands on deaf ears.” He cited worries about having to change a machine’s air filter in a room that contains toxic material.The Ultium spokeswoman said that signs were posted throughout the plant with QR codes linking to safety information, and that paper handouts were also available. She said that the company had specific safety standards for issues like respiratory protection and chemical control and that it encouraged all workers to report concerns.The union campaign at Ultium took place against the backdrop of a recent U.A.W. election in which reformist candidates defeated several members of the longtime leadership caucus, citing rampant corruption within the union and members’ frustrations with limited improvements in their contracts over the past decade.In an interview, Shawn Fain, who will face the incumbent president, Mr. Curry, in a runoff election, said the union’s relative lack of progress in organizing electric vehicle plants reflected years of complacency with the union’s leadership.Mr. Fain said the Big Three automakers pursued electric vehicle joint ventures with foreign companies to make it harder for workers there to unionize. “The whole system is put together to circumvent the U.A.W. and any type of relationships with current members and employees,” he said. “At the first sign of that, our leadership should have went to war.”General Motors said it relied on joint ventures to bring in expertise that complemented its existing battery technology and to help meet the projects’ enormous capital requirements. The U.A.W. did not respond to a request for comment. More

The producer price index, a measure of what companies get for their products in the pipeline, increased 0.3% for the month and 7.4% from a year ago.
A 38% surge in wholesale vegetable prices helped push the food index up by 3.3%, offsetting an identical 3.3% decline in energy costs.
Markets now will turn their attention to the more closely watched consumer price index, which is due out Tuesday morning.

Wholesale prices rose more than expected in November as food prices surged, dampening hopes that inflation could be headed lower, the Labor Department reported Friday.
The producer price index, a measure of what companies get for their products in the pipeline, increased 0.3% for the month and 7.4% from a year ago, which was the slowest 12-month pace since May 2021. Economists surveyed by Dow Jones had been looking for a 0.2% gain.

Excluding food and energy, core PPI was up 0.4%, also against a 0.2% estimate. Core PPI was up 6.2% from a year ago, compared with 6.6% in October.

Stocks fell following the report after previously indicating a positive open on Wall Street. Treasury yields moved higher.
Markets now will turn their attention to the more closely watched consumer price index, which is due out Tuesday morning. A day later, the Federal Reserve will conclude a two-day meeting with an announcement on where interest rates are heading.
The hot inflation data keeps the Fed on track for another rate increase, likely a 0.5% hike that would push benchmark borrowing rates to a target range of 4.25%-4.5%. Policymakers have been pushing rates higher in an effort to quell stubborn inflation that has emerged over the past 18 months after being mostly dormant for more than a decade.
“The monthly increase in producer prices illustrates the need for continued tightening, albeit at a slower pace,” said Jeffrey Roach, chief economist at LPL Financial. “The inflation pipeline is clearing and consumer prices will slowly move closer to the Fed’s long run target.”

In other economic news Friday, the University of Michigan Index of Consumer Sentiment came in higher than expected, registering a 59.1 reading against the Dow Jones estimate for 56.5 and below November’s 56.8. One-year inflation expectations also moved lower, falling to 4.6%, 0.3 percentage point below a month ago.
Also, wholesale trade inventories rose 0.5% in October, below the 0.8% estimate.
The market was most focused on the PPI report, though the consumer sentiment survey provided some optimism on the inflation front.
Services inflation accelerated for the month, rising 0.4% after being up just 0.1% the previous month. One-third of that gain came from the financial services industry, where prices surged 11.3%. That was offset somewhat by a sharp decline in passenger transportation costs, which fell 5.6%.
On the goods side, the index rose just 0.1%, a steep decline from its 0.6% October gain. That modest gain came despite a 38.1% acceleration in prices for fresh and dry vegetables. Prices moved higher across multiple food categories even as the gasoline index tumbled 6%.
Roach said the soaring food price index is “likely an anomaly and not necessarily reflecting a change in trend.”
The release comes amid other signs that price increases were at least decelerating from a pace that had put inflation at its highest level in more than 40 years. However, the data Friday, which tends to be a leading indicator of underlying price pressures, shows that shaking off inflation could be a long slog.
A year ago, headline PPI rose 1% for the month and 10% on a 12-month basis.
“Month-over-month PPI rising slightly and coming in just over expectations is yet another reminder of how sticky inflation is and that it will take time before we see it normalize,” said Mike Loewengart, head of model portfolio construction for Morgan Stanley’s Global Investment Office. “Keep in mind compared to where we were a year ago, we are in a better place and headed in the right direction.”
This was the third month in a row that headline PPI increased 0.3%. On an annual basis, the increase represents a decline from the 11.7% peak hit in March, but is still well ahead of the pre-pandemic pace at least going back to 2010.
The increase came despite a 3.3% decline in final demand energy costs. That was offset by an identical 3.3% increase in the food index. The trade index rose 0.7%, while transportation and warehousing fell 0.9%.
Excluding food, energy and trade services, PPI increased 0.3% from a month ago and was up 4.9% on an annual basis, the lowest since April 2021.

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Two women — the first female Treasury secretary and the first Native American to serve as U.S. treasurer — now have their signatures on America’s currency.WASHINGTON — During a recent appearance on “The Late Show With Stephen Colbert,” Treasury Secretary Janet L. Yellen faced an awkward question: After nearly two years in the job, why was the signature of her predecessor, Steven T. Mnuchin, still scrawled across the nation’s currency?The answer, she explained, was a quirk of currency design that required a new treasurer of the United States to be in place before the money could be remade with both of their signatures.That finally happened on Thursday when the first bank notes bearing the name of America’s first female Treasury secretary were unveiled. The occasion was another crack in the glass ceiling for Ms. Yellen and the notoriously male-dominated field of economics.The bills will also bear the name of Marilynn Malerba, the first Native American to hold the role of treasurer. The first $1 and $5 notes with their signatures will enter circulation next month.Ms. Yellen, who has previously served as the Federal Reserve chair and the head of the White House’s Council of Economic Advisers, said on Thursday that having her name on the currency was more than a personal career achievement.“Today is not about me or a new signature on our currency,” Ms. Yellen said during a visit to the Bureau of Engraving and Printing in Fort Worth, Texas. “It’s about our collective work to create a stronger and more inclusive economy.”Inflation F.A.Q.Card 1 of 5What is inflation? More

The money comes from last year’s Covid-19 relief package and will avert cuts of up to 60 percent in pensions for 350,000 Teamster truck drivers, warehouse and construction workers and food processors.WASHINGTON — President Biden announced Thursday that he was investing $36 billion in federal funds to save the pensions of more than 350,000 union workers and retirees, a demonstration of commitment to labor just a week after a rupture over an imposed settlement of a threatened rail strike.Mr. Biden gathered top union leaders at the White House to make the commitment, described by the White House as the largest ever award of federal financial support for worker and retiree pension security. The money, coming from last year’s Covid-19 relief package, will avert cuts of up to 60 percent in pensions for Teamster truck drivers, warehouse workers, construction workers and food processors, mainly in the Midwest.“Thanks to today’s announcement, hundreds of thousands of Americans can feel that sense of dignity again knowing that they’ve provided for their families and their future, and it’s secure,” Mr. Biden said, joined by Sean M. O’Brien, president of the Teamsters, and Liz Shuler, president of the A.F.L.-C.I.O., as well as Marty Walsh, the U.S. secretary of labor.The Biden PresidencyHere’s where the president stands after the midterm elections.A New Primary Calendar: President Biden’s push to reorder the early presidential nominating states is likely to reward candidates who connect with the party’s most loyal voters.A Defining Issue: The shape of Russia’s war in Ukraine, and its effects on global markets, in the months and years to come could determine Mr. Biden’s political fate.Beating the Odds: Mr. Biden had the best midterms of any president in 20 years, but he still faces the sobering reality of a Republican-controlled House for the next two years.2024 Questions: Mr. Biden feels buoyant after the better-than-expected midterms, but as he turns 80, he confronts a decision on whether to run again that has some Democrats uncomfortable.The pension investment came just a week after Mr. Biden prodded Congress to pass legislation forcing a settlement in a long-running dispute between rail companies and workers, heading off a strike that could have upended the economy just before the holidays. While the agreement included wage increases, schedule flexibility and an additional paid day off, several rail unions had rejected it because it lacked paid sick leave. A move to add seven days of paid sick leave failed in Congress before Mr. Biden signed the bill.The showdown over the rail settlement left Mr. Biden in the awkward position of forcing a deal over the objections of some union members even though he had promised to be the “the most pro-union president you’ve ever seen.” The pension rescue plan announced on Thursday put him back in the more comfortable stance of allying himself with organized labor, a key constituency of the Democratic Party.The $36 billion, drawn from the $1.9 trillion American Rescue Plan passed last year, will go to the Central States Pension Fund, which is largely made up of Teamster workers and retirees. The fund has been the largest financially distressed multi-employer pension plan in the nation. As a result of shortfalls, pensioners were facing 60 percent cuts over the next few years, but the White House said the federal funding will now ensure full benefits through 2051.Many of the affected workers and retirees are clustered in Midwestern states that have been battlegrounds in recent elections, including Michigan, Ohio, Wisconsin and Minnesota as well as other states like Missouri, Illinois, Florida and Texas.In his remarks, Mr. Biden expressed sympathy for workers and retirees facing cuts not of their own making. “For 30, 40, 50 years you work hard every single day to provide for your family. You do everything right,” he said. “But then imagine losing half of that pension or more through no fault of your own. You did your part. You paid in. Imagine what it does financially to your peace of mind, to your dignity.”Mr. O’Brien hailed Mr. Biden’s move. “Our members chose to forgo raises and other benefits for a prosperous retirement, and they deserve to enjoy the security and stability that all of them worked so hard to earn,” he said in a statement. While much of public policy is determined by big corporations, “it’s good to see elected officials stand up for working families for once.”Republicans called it a politically inspired payoff. Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, dubbed the rescue plan “the largest private pension bailout in American history,” saying it rewarded those who mismanaged their pensions.“Despite years of bipartisan negotiations and recommendations, Democrats rejected protections for union workers in other underfunded multi-employer plans that are not as politically connected as the Teamsters’ Central States plan,” Mr. Brady said. “Now, American taxpayers are being forced to cover promises that pension trustees never should have been allowed to make.” More

The 2022 surplus came to 102 billion riyals ($27 billion), constituting 2.6% of Saudi gross domestic product, according to the kingdom’s finance ministry, releasing what it said were preliminary estimates.
Economists estimate Saudi Arabia needs the price of oil to be between $75 and $80 a barrel in order to balance its budget.
Geopolitical events, primarily Russia’s war in Ukraine and ensuing sanctions on Russian oil from Western countries, have put pressure on oil supplies, sharply increasing energy prices.

The Kingdom Tower (center) stands on the skyline above the King Fahd highway in Riyadh, Saudi Arabia.
Simon Dawson | Bloomberg | Getty Images

Saudi Arabia reported its first budget surplus in nearly 10 years, thanks to its revenue being ramped up by elevated oil prices.
The 2022 surplus came to 102 billion riyals ($27 billion), constituting 2.6% of Saudi gross domestic product, according to the kingdom’s finance ministry, releasing what it said were preliminary estimates.

Total revenue for this year was estimated at 1.234 trillion riyals, while spending amounted to 1.132 trillion riyals.
The government of the hydrocarbon-rich country approved a 1.114 trillion riyal budget for 2023 and expects to still see a surplus of 16 billion riyals. That’s a significant reduction from this year’s surplus, amounting to just 0.4% of GDP, but is a surplus nonetheless and is based on an oil price far lower than what many analysts expect for next year.
“Our analysis suggests the budget is based on an oil price forecast of around USD 75 (per barrel), well below our house forecast of USD 105 (per barrel) for next year,” Daniel Richards, MENA economist at Dubai-based bank Emirates NBD, wrote in a research note.
Economists estimate Saudi Arabia needs the price of oil to be between $75 and $80 a barrel in order to balance its budget.
International benchmark Brent crude futures traded up 0.2% at $77.45 a barrel on Thursday afternoon in London, while U.S. West Texas Intermediate futures rose 1.4% at $73.09.

Growth for the country is forecast to drop significantly compared to this year, however, slowing from 8.5% this year to 3.1% in 2023, the finance ministry said.

Crude oil storage tanks at the Juaymah Tank Farm in Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia, in 2018.
Simon Dawson | Bloomberg | Getty Images

Many Middle Eastern banks are receiving neutral outlooks from ratings agencies, the ratings agency Fitch reported, which it says reflects “solid economic conditions.” But Saudi Arabia stands out for having positive outlooks on most of its banks’ Issuer Default Ratings, “driven by improvements in its balance sheet given higher oil revenue and fiscal consolidation,” Fitch wrote in a report this week.
Still, analysts at Goldman Sachs think expenditure will overshoot the budget next year, as Saudi Arabia’s government pursues expensive megaprojects like the futuristic city of NEOM, Vision 2030 investments, and more. Saudi Crown Prince Mohammed bin Salman launched Vision 2030 in 2016 with the aim of dramatically transforming and modernizing Saudi Arabia and reducing its economic reliance on oil revenues.
Goldman also forecasts a lower oil price for the next year than the analysts at Emirates NBD.
“Our own projections, based on an average oil price of $90/bbl in 2023, lead to revenues of SAR 1,187bn, slightly below the 2022 estimated out-turn,” a report from Goldman Sachs on Thursday said.
“With our expenditure forecast at SAR1,213bn (9% above budget), the result would be a deficit of 0.7% of GDP.”

Visitors watch a 3D presentation during an exhibition on ‘Neom’, a new business and industrial city, in Riyadh, Saudi Arabia, October 25, 2017.
Faisal Al Nasser | Reuters

Spending overshoot took place in 2022, with current expenditure going over budget by 14%, Goldman’s report wrote, citing data from the government’s budget statement. Capital spending, meanwhile, was 64% higher than budgeted and government spending increased by 9% year-on-year.
“The expenditure overshoot was mainly related to spending on military and security, as well as healthcare,” Goldman’s analysts wrote.
Geopolitical events, primarily Russia’s war in Ukraine and ensuing sanctions on Russian oil from Western countries, have put pressure on oil supplies, sharply increasing energy prices.
“Much of the fiscal situation and growth story is of course directly related to high energy prices, and indirectly related to the factors and geopolitical events moving prices,” Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington, told the AFP.
“Yet,” he added, “Saudi Arabia does deserve credit for its fiscal consolidation and economic reforms, which have also helped the overall economic picture.”

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“Transforming Spaces” is a new series about women driving change in sometimes unexpected places.Margo Miller, the executive director of the Appalachian Community Fund, describes herself as a “proud Black mountain woman” in a region not widely known for being home to generations of Black people.In her day-to-day work, Ms. Miller, 53, is in charge of financially supporting regional organizations, individuals and groups working to advance social, economic, racial and environmental justice across Appalachia. The largely economically depressed region is a vast swath of land that encompasses some or all of 13 states, including parts of Kentucky, Tennessee, Pennsylvania, the Carolinas, Maryland and all of West Virginia.Support from the fund is sometimes a couple hundred dollars and other times $5,000 or more, depending on the year and the causes.In 2021, the organization gave out more than $600,000 to organizations, individuals and groups in Appalachia, where the often stunning landscape consists of family farms, twisting back roads, steep mountain passes and fairly secluded communities, some with newly revitalized downtowns. Since its inception in 1987, the fund has given away more than $6 million. Ms. Miller said that lately it had been getting a lot more support from a diverse array of donors.“Our range is 50 cents to $50,000,” she said. “We have a donor who would tape quarters inside of an envelope and send it to us.” One year, she added, another regular donor sent a gift of $50,000, “saying, ‘I know the region can really use this gift this year.’”Ms. Miller, who lives in East Knoxville, has become one of the most powerful people in philanthropy in a rapidly evolving region that has long been marred by stereotypes, misunderstanding and, for Black people, erasure, according to academics and leaders of nonprofit groups. Many Black people, including Ms. Miller’s family, have lived in Southern Appalachia and Central Appalachia for at least three generations (she had relatives who worked in Kentucky’s coal mines), but their stories are not often told.Margo Miller, at the Knoxville Botanical Gardens in East Knoxville, a historically Black neighborhood where she has lived since 2008.Jessica Tezak for The New York TimesMs. Miller said she relished having access to the natural beauty that she strives to celebrate as an artist and activist.Jessica Tezak for The New York TimesInstead, the Appalachia portrayed in popular culture tends to be largely associated with stories of white coal miners and their families, a narrative that several scholars, sociologists, artists and residents, Ms. Miller among them, have been working hard to shift.Dr. Enkeshi El-Amin, an assistant professor of sociology at West Virginia University, doesn’t remember exactly when or how she met Ms. Miller, but she does recall hearing about her since her earliest days of living in Knoxville in 2013. “Margo’s name was one of those names that you just knew,” said Dr. El-Amin, whose academic work focuses on how “racial practices shape Black places and how Black people are, in turn, involved in practices that define, contest and reimagine places.” Ms. Miller, she said, “is sort of like an O.G.” She added, “Her name was always there, which tells you a lot.”Ms. Miller, in fact, has always been a natural leader, whether she realized it or not.As a child growing up among the mountains and hollows, or hollers as the valleys are colloquially called, of Roane County, Tenn., and later in North Knoxville, she said, she was “the bossy one who wanted to play the teacher.” In her mostly white elementary school, she was student of the year (the first Black student to receive the title), and in high school she was class president (the first Black student to hold the position). She is a self-professed nerd.“Being a nerd is kind of trendy now, but back then it wasn’t the case,” she said in a recent interview from her office, surrounded by crafting supplies. She’s a big crafter too. “I definitely was a kid who had my nose buried in a book.Standing nearly 5 feet 10 inches, Ms. Miller today knows how to command a room, whether she is speaking or not. But she recalled that the earliest days of her career as an administrator were more challenging, in part, because she is a Black woman. She talks of going on job interviews in the 1990s and white men being surprised when she entered the room. Some would start to say, “I wasn’t expecting you. … ” and she would have a ready comeback.Ms. Miller in 2014, with Rev. Keith Caldwell, left, then the vice president of the N.A.A.C.P. in Tennessee, presented a social justice plan at the Highlander Research and Education Center, which nurtures movements for social, economic and restorative environmental change in disenfranchised communities in Appalachia. Ebony Blevins“Back then, I would laugh and say: ‘I know. You weren’t expecting me to be so tall,” she said. “I would really try to make them feel more comfortable and they’d look at me like, ‘Who are you? I’m waiting for a white Margo Miller.’” Those experiences were demoralizing, but she found joy, support and opportunities to grow in Knoxville’s theater community, where she was surrounded by other Black people. She had immersed herself in theater while in college there and became a performer and stage manager.Ms. Miller said her experiences with racism were not the same today. “I’m currently surrounded by a community of social justice folks who are all about equity and inclusion and anti-racist practice,” she said. “I’m fortunate and do not have the same experience of other sisters who work for mostly white boards and trustees. Many of them have uphill battles.”African Americans make up about 10 percent of Appalachia’s population while those identifying as Hispanic or Latino account for 5.6 percent of the population, a number that is growing, according to the Appalachian Regional Commission. Still, sociologists and historians said, Black and Latino people with roots in Appalachia have a deep connection to the area and their rich history should be studied and appreciated. People like Ms. Miller, who are connected to the region’s history, help with this effort, they said.“You get coal mining stories or you’ll hear of good race relations here because there weren’t many Black folks here, but those stories distort,” Dr. El-Amin, of West Virginia University, said. “Black folks have always been in the region. From slavery on up.”The fund that Ms. Miller heads supports all Appalachians, regardless of race, gender, sexuality or other identities, but under her leadership, which started in 2011, minority Appalachians say they have felt more included. For them, merely seeing a Black woman who is committed to the growth and development of the area is a comfort and source of encouragement.Richard Graves, an artist in Abingdon, Va, a 2021 recipient of $5,000 from the community fund’s fellowship program said that the money made it possible for him to find stability during the first year he worked as an artist full-time. The foundation gave a total of $80,000 to fellows like Mr. Graves. But even more valuable than the financial support, he said, was the community support that came with being in the fund’s network.“Because of how sectioned and pocketed off these rural communities are, doing community work together can be hard,” he said. “It gave me faces and names of people across the region. We met on Zoom every two weeks and continue to keep in touch.”Strengthening community and bringing people together is one of Ms. Miller’s strongest qualities, according to several organizers and beneficiaries of the organization’s fund.“Margo has been a field builder making space for nonwhite voices, nonwhite leadership in the region, in central Appalachia,” Lora Smith, the chief strategy officer for the Foundation for Appalachian Kentucky, said. “She is as unapologetically Appalachian as she is unapologetically a Black woman leading a community fund.”Ms. Miller in the craft room at her home in Knoxville. She retreats there to create and play, finding inspiration in thriftiness and working with various fibers, particularly patchwork.Jessica Tezak for The New York TimesMs. Miller’s fabric shelves in her craft room at her home. She has learned through Appalachian, Japanese, Indian and African methods of mending that great beauty can come out of frugality and being resourceful.Jessica Tezak for The New York TimesMs. Smith, who took over Ms. Miller’s seat as the co-chair of the Appalachian Funders Network, a nonprofit, said that beyond her professional qualifications, Ms. Miller leads with care, openness and vulnerability. She recalled a meeting in which Ms. Miller unexpectedly took words participants had written and combined them into a powerful poem and read it aloud. Ms. Miller has been writing poetry and been an avid crafter since childhood. She’s also a D.J.“It was amazing to then see how people responded to that in a very humanistic way and the vulnerability and openness that her openness brings out in others,” Ms. Smith said. “She leads from a place of courageous joy. The Appalachian Community Fund resources some of the most forward-thinking and radical work in Appalachia and has done so for decades. That takes a courageous leader who is rooted in her values and can take critique and blowback when it comes.”Ms. Miller’s generosity extends beyond the workplace, according to stories from Black activists, organizers and scholars. Dr. El-Amin recalled sharing in early 2021 that she was concerned about whether The Bottom, a space she had created for Black people to gather, study and experience culture together, would survive amid the gentrification of East Knoxville. She was worried that they would not be able to afford to keep the space.“Margo said, ‘I will take the equity out of my house for you all to buy the building,’” Dr. El-Amin recalled. “This is something I will forever remember and she did it.” To Dr. El-Amin, this was yet another example of Ms. Miller’s commitment to fostering Black history, voices and safety in the community.“I’m grateful that I was in a position to make the purchase happen,” Ms. Miller said, adding that the line of equity loan was repaid in less than a year, and that she then signed a deed to remove herself from ownership of the building.Ms. Smith said she judges how good executive directors are by how well-received they are by their younger employees and collaborators. The best leaders, she said, engage with young people who may have different ways of thinking and may push them beyond their comfort zones. Ms. Miller, she said, is one of these leaders.“She embraces next-generation leadership and is actively standing with and supporting younger people,” Ms. Smith said, “especially Black, Brown and queer folks, in stepping into their power and leading the region forward.”For her part, Ms. Miller said she anticipated that she would stay in her role for another year or so, but felt that she was ready to seek out new challenges.“I want to figure out who I want to be when I grow up,” she said. “I think in order to serve in the next leg of whatever I do, I need to take the time to rest and welcome the next generation of philanthropic leaders.”Ms. Miller, a self-proclaimed proud Black mountain woman, centers herself while overlooking the LeConte Meadow at the Knoxville Botanical Gardens.Jessica Tezak for The New York Times More