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Wednesday, May 22, 2024 | Daily Newspaper published by GPPC Doha, Qatar.
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 Pratap John
Pratap John
Pratap John is Business Editor at Gulf Times. He has mainstream media experience of nearly 30 years in specialties such as energy, business & finance, banking, telecom and aviation, and covered many major events across the globe.
Economic growth across member states of the Gulf Co-operation Council (GCC) countries will remain strong over the next 12 to 18 months, on the back of supportive oil prices and because ambitious economic diversification agendas will shield the non-oil space where banks conduct the bulk of their lending.
Business
GCC Islamic banks net profitability to top conventional peers in 2024: Moody's

GCC Islamic banks are benefitting from high oil prices, Moody’s Investors Service said and noted their net profitability will exceed that of conventional peers over the next 12 to 18 months.A reversal in the tightening monetary policy from the US Federal Reserve through the US dollar peg with GCC countries’ domestic currencies is not expected before the end of next year.This will continue to help net profit margin preservation for GCC Islamic banks.“We expect GCC Islamic banks to retain a net profit margin advantage over conventional banks in 2024 although this is converging, particularly in Saudi Arabia. The return on assets of GCC Islamic banks will remain solid because loss provisioning will remain in check,” Moody’s said.Governments' continued backing and promotion of the Islamic finance industry, growing demand for Shariah-compliant products across the GCC region and ample funding will continue to drive faster growth for Islamic banking assets than conventional peers. Saudi Arabia will retain its leadership in term of market penetration but potential for growth elsewhere remains high.Consolidation continues to present growth opportunities, it said.Solid economic conditions will preserve the performance of Islamic financing despite global uncertainty.The focus on retail financing by the GCC Islamic banks will continue to support asset quality, Moody’s said.Moderate inflation levels across the region when compared to the rest of the world will also mitigate asset risks.They will continue to maintain strong capital and liquidity buffers, enabling them to capitalise on the demand for Shariah-compliant financial services across the region.Economic growth across member states of the Gulf Co-operation Council (GCC) countries will remain strong over the next 12 to 18 months, on the back of supportive oil prices and because ambitious economic diversification agendas will shield the non-oil space where banks conduct the bulk of their lending.Despite oil production cuts, GCC countries — where a significant part of the government revenue is derived from oil production — will continue to enjoy substantial accumulated financial buffers and fiscal firepower to contain inflation below levels of advanced economies.Tight financial conditions across the globe will continue to dampen global economic growth during the rest of 2023 and keep economic expansion below trend in 2024, Moody’s noted.Recession risk in the US has receded, however below-trend output is yet to materialise for inflation to sustainably decline to Federal Reserve's target, while China’s economy is facing considerable growth challenges.Inflation is easing as expected and will continue to recede over the next year, but risks remain. Consumer prices will continue to moderate across advanced and emerging market economies where reasonably sound macroeconomic management, together with central bank policy credibility, has kept inflation expectations in check.However, risks to the inflation outlook from commodity price spikes and exceptionally resilient demand persist, Moody’s noted.

People queue to check in at Heathrow Airport. A recent report by UN’s specialised agency -- United Nations World Tourism Organisation, indicates international tourism has recovered from the worst crisis in history as visitor arrivals reached 84% of pre-pandemic levels between January and July of this year.
Business
197 countries lift pandemic restrictions; tourists’ arrival surges

Restriction-free policies in tourism benefit countries in terms of economic growth, job creation, cultural exchange, and environmental conservation..text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px;}@media only screen and (max-width: 767px) {.text-box {width: 30%;}}**media[81786]**A recent report by UN’s specialised agency - United Nations World Tourism Organisation (UNWTO), indicates international tourism has recovered from the worst crisis in history as visitor arrivals reached 84% of pre-pandemic levels between January and July of this year. As growing numbers of countries around the world ease restrictions on travel, tourism has become a major beneficiary, UNWTO says.Currently, some 197 countries are without any Covid-19 travel restrictions and they represent 89% of all countries in the world, the UN body says.By the end of July, international tourist arrivals reached 84% of pre-pandemic levels.Some 700mn tourists travelled internationally between January and July 2023, 43% more than in the same months of 2022.Data reveal that July of this year was the busiest month, with 145mn international travellers recorded, about 20% of the seven-month total.All regions of the world enjoyed strong rates of tourism recovery over the first seven months of this year, driven by demand for international travel from several large source markets.The Middle East, GCC countries in particular, reported the best results in January-July this year, with arrivals 20% above pre-pandemic levels. The region remains the only one to exceed 2019 levels so far.Europe, the world’s largest destination region, reached 91% of pre-pandemic levels, supported by robust intra-regional demand and travel from the US.Africa recovered 92% of pre-crisis visitors this seven-month period, and the Americas 87%, according to available data.In Asia and the Pacific region, recovery accelerated to 61% of pre-pandemic arrival levels after opening many destinations and source markets at the end of 2022 and earlier this year.If the current trend continues, industry experts say 2023 would see a remarkable recovery in tourism and global travel.UNWTO figures point to international tourism remaining well on track to reach 80% to 95% of pre-pandemic levels by the year-end.Prospects for the last quarter of the year point to continued recovery, according to the latest UNWTO Confidence Index, though at a more moderate pace following the peak travel season of June-August.These results will be driven by the still pent-up demand and increased air connectivity, particularly in the Pacific region, where recovery is still subdued.The reopening of China and other Asian markets and destinations is expected to continue boosting travel both within the region and other parts of the world.That said, tourism recovery faces challenges due to geo-political issues as well as economic concerns. In many countries, persisting inflation and rising oil prices have translated into higher transport and accommodation costs.In many major markets, particularly in the US and Europe, this could weigh on spending patterns over the remainder of the year, with tourists increasingly seeking value for money, travelling closer to home and making shorter trips by road.UNWTO data clearly attest the fact that when a country implements restriction-free policies, it encourages more tourists to visit there. Travellers are more likely to choose destinations where they don't have to navigate complex entry requirements or face the risk of sudden policy changes.Undoubtedly, tourism is a significant contributor to a country's economy. More tourists mean more spent money on accommodation, food, transportation, and various activities. This injection of foreign currency helps stimulate economic growth.With an influx of tourists, there is often an increased demand for services like hospitality, transportation, and local experiences. This creates newer jobs, reduces unemployment and improves livelihoods for local communities.Restriction-free policies provide a favourable environment for local businesses, especially those in the tourism industry. Hotels, restaurants, tour operators, and other businesses that rely on tourism benefit from increased customer traffic.To cater to the increasing number of tourists, countries invariably invest in infrastructure development. This includes improvements to transportation networks, airports, and the overall tourist experience. These upgrades benefit both tourists and locals.For any country, dependence on a single industry or an export commodity is risky. Tourism is one sector that provides an additional source of revenue, helping to diversify and stabilise economic growth.Undoubtedly, restriction-free policies enhance a country's global image and diplomatic relations, making them an essential component of a thriving tourism industry.

Qatar is second in the Middle East terms of median download speeds for both 4G and 5G at 68.63 Mbps and 462.96 Mbps, respectively, global network intelligence and connectivity insights firm Ookla has said in a research report.
Business
Qatar second in Middle East in 4G, 5G median download speeds: Ookla

Qatar is second in the Middle East terms of median download speeds for both 4G and 5G at 68.63Mbps and 462.96Mbps, respectively, global network intelligence and connectivity insights firm Ookla said in a research report.The research showed Qatar has the “third highest game score” in the Middle East at 82.81 on a 100-point scale.“This result reflects the superior mobile network performance in the Qatar market, which helps to deliver a good gaming experience,” Ookla noted.Game scores were consistently higher for 5G than 4G users in all GCC countries, it said.The gaming experience benefits from the larger bandwidth and lower latency offered by 5G, contributing to smoother and more responsive gameplay. Game scores on 4G lagged those on 5G by a range from 5.37% in Oman to 8.26% in Saudi Arabia.GCC operators have the potential to improve the gaming experience by continuing to improve their 5G infrastructure, migrating more customers to 5G, and establishing local gaming servers, Ookla said.The region benefits from a large youth demographic, a growing casual gaming base, widespread smartphone adoption, and high-speed Internet access. Operators and governments are also helping to increase public engagement in gaming.Most casual gamers should be able to enjoy a smooth experience over 5G thanks to fast download and upload speeds, but some latency-sensitive games (like multiplayer shooters) may have noticeable lags. Mobile operators can explore different approaches (such as deploying edge computing infrastructure) to improve game responsiveness and prepare their networks for more data-intensive games.Download speed is essential in creating a smooth gaming experience without interruptions or degradations in streaming quality. High download speeds are also important for downloading digitally distributed games and updates, Ookla said.Download speed requirements for online mobile gaming vary depending on the game type (for example, cloud gaming needs higher bandwidth than a game played on a smartphone), gamer profile (for example, competitive gamers will need higher bandwidth than casual players) and use cases (for example, downloading game updates compared to playing preload games).In its analysis, Ookla assumed that 25Mbps was the minimum download speed to enjoy a good gaming experience for casual gamers (who represent the majority of gamers).According to Ookla’s data, all GCC markets comfortably exceed that requirement on 4G and surpass it significantly on 5G.The median 5G speed across GCC countries was 6.8 times faster than the median 4G speed (345.53Mbps vs. 43.9Mbps).Upload speed also plays an essential role in creating a smooth gaming experience without interruptions or quality degradation, particularly in multiplayer games, it said.Ookla used 3Mbps as a reference point based on the recommended minimum upload speed for a good gaming experience for casual gamers.Ookla’s data shows that GCC markets are “crushing it when it comes to exceeding” upload requirements for both 4G and 5G.In absolute terms, Qatar, Bahrain, and the UAE offer the fastest upload speeds, reaching a maximum of 38.48Mbps for the latter, Ookla noted.“The GCC region has a vibrant and untapped gaming market poised for tremendous growth. This potential hinges on the robustness of the telecoms infrastructure. Gulf operators’ investments in 5G infrastructure helped them climb Ookla’s Game Score leaderboard and demonstrated their commitment to putting their countries on the gaming map.“Operators can continue to improve the gaming experience and further minimise latency by deploying local gaming servers, edge computing infrastructure, and 5G SA to make games more responsive and smooth. These improvements will put the region in an even better position to lead game development and foster the local gaming ecosystem,” noted Karim Yaici, lead industry analyst at Ookla.

The MoU will establish a framework that aims to improve the efficiency of conformity assessment processes in the region and ensure that chemical and petrochemical products and processes meet specified standards and regulations.
Business
GPCA, GAC to to establish 'robust' quality infrastructure for GCC's chemicals industry

The Gulf Petrochemicals and Chemicals Association (GPCA) has signed a memorandum of understanding (MoU) with the GCC Accreditation Centre (GAC) to collaborate in the area of conformity assessment and accreditation and develop sustainable solutions for the petrochemical and chemical industry in the GCC region that will contribute to establishing a robust quality infrastructure.The MoU will establish a framework that aims to improve the efficiency of conformity assessment processes in the region and ensure that chemical and petrochemical products and processes meet specified standards and regulations.Additionally, it is aimed at streamlining accreditation procedures, fostering conformity across various certification activities, and establishing a robust quality infrastructure within the GCC region.Recognising the critical importance of environmental preservation, the MoU highlights a shared commitment by both GPCA and GAC to combatting plastic waste.The agreement will involve the adoption of an efficient plastic pellets, flakes and powder management scheme to address plastic material leakage and safeguard marine environments and marine wealth regionally and globally, underlying GPCA members’ commitment to the Operation Clean Sweep programme and foster a sustainable and circular plastic economy.Dr. Abdulwahab al-Sadoun, Secretary-General, GPCA, commented: “I welcome this valuable partnership with the Gulf Accreditation Centre, which marks a significant milestone in the history of the region’s chemical and petrochemical industry, underlying its commitment to accountability, transparency and compliance. Together we will collaborate closely on raising the bar and welcoming a new era in conformity assessment and accreditation across the industry in the region.”Moteb al-Mezani, Director-General, GAC, commented: “We are thrilled to support the initiatives of the Gulf Petrochemicals and Chemicals Association (GPCA) and contribute with GAC internationally recognised accreditation services to achieve the goals of this memorandum of understanding that reflects our joint dedication to fostering excellence and sustainability in the chemical and petrochemical industry within the GCC region.“Together, we will pave the way for a future marked by accountability, transparency, and compliance, ensuring that our industry meets the highest standards and contributes to a cleaner, more environmentally responsible world.”

Delegates at the 13th annual edition of the Gulf Petrochemicals and Chemicals Association (GPCA) Agri-Nutrients Conference in Doha on Monday.
My News
GCC can help address global food security issues: Qafco CEO

The GCC region can help address some of the most pressing challenges facing today, namely food security, climate change and preservation of global bio-diversity, noted Qafco CEO Abdulrahman al-Suwaidi.He was delivering opening remarks at the 13th annual edition of the Gulf Petrochemicals and Chemicals Association (GPCA) Agri-Nutrients Conference here yesterday.“Accordingly, the theme of this year’s conference – ‘Sustainable transformation in practice – the future of agri-nutrients’ captures the essence of the discussion we do have,” noted al-Suwaidi, also chairman, of the Agri-Nutrients Committee at GPCA.The United Nations Sustainable Development Goal 2 is about creating a world free of hunger by 2030.“The number of people facing hunger and food insecurity has been rising since the SDG was established. Today, statistics are shocking. The UN estimates that approximately 2.4bn people, which represents 29.6% of the world’s population were hungry by 2022.“As harsh as that fact is, that number could have been higher without agri-nutrients,” al-Suwaidi noted.He said, “The first priority of the agri-nutrients industry is to help to ensure the world has sufficient amount of healthy food for everyone. However, we must do this in an environmentally-responsible manner. The GCC is home to the world’s leading low-carbon ammonia projects. There is potential to further reduce GHG emissions.”According to a GPCA analysis, in 2022, GCC agri-nutrient production amounted to 34.6mn tonnes, which represents 16.2% of global production. As global demand for agri-nutrients continues to increase exponentially, the agri-nutrient industry must develop accurate, effective and practically waste-free agri-nutrients to help support global food production and contribute to food security, speakers said.At the conference yesterday, a keynote address entitled ‘Looking ahead – envisioning the world of agri-nutrients in 2050’ was delivered by Federico Zardi, CEO, Casale SA.In his opening keynote, Zardi called upon the agri-nutrient value chain to engage in “a co-operative competitive scenario” where healthy competition continues to be the driving force behind innovation and progress, and co-operation among stakeholders contributes to “the greater good”.Abdulrahman Shamsaddin, CEO, Sabic Agri-Nutrients, and vice-chair, Agri-Nutrients Committee, GPCA, presented the keynote address, in which he detailed Sabic’s 26 years of agri-nutrient innovation.In a plenary session, Prof Robert Stavins, AJ Meyer Professor of Energy and Economic Development, Harvard University, discussed the challenges and opportunities of climate change and energy transition through video-link.The opening remarks today will be delivered by Yasser A. Rahim Alabbasi, CEO, GPIC and Board Member, International Fertiliser Association (IFA). He will be followed by John Baffes, senior economist, Macroeconomics, Trade & Investment, World Bank Group, who will present the keynote address. Page 8

Dr Abdulwahab al-Sadoun, secretary-general of the GPCA, during an interview with Gulf Times . PICTURE: Shaji Kayamkulam
Business
Qatar’s fertiliser, petchem industries have ample scope for further growth: Al-Sadoun

Qatar’s fertiliser and petrochemical industries have ample scope for growth, noted Dr Abdulwahab al-Sadoun, secretary-general of Gulf Petrochemicals and Chemicals Association (GPCA).“Qatar is the ‘birth place’ of the agri-nutrients industry. Fertiliser production in the region started through Qafco in 1969. And in 1974, polyethylene production started through Qapco,” al-Sadoun said in an exclusive interview with Gulf Times in Doha on Monday.“It has been significant growth over the years, because of God’s grace. I am quite satisfied with the progress made by this industry in Qatar. There is a potential to further grow the industry in Qatar, which has been blessed with natural resources,” al-Sadoun noted.Agri-nutrients (fertilisers) represent a substantial part of the GCC chemical industry, and play a crucial role in the GCC’s road to sustainability and food security.“The GCC region is blessed with ample quantities of natural resources, be it natural gas, sulphur or phosphate, which are the ingredients to make fertiliser or agri-nutrients. We have been expanding our production capacity since the launch of this industry here in Doha, Qatar – in the late 60s.”Al-Sadoun revealed that the GCC region produced about 33mn tonnes of fertilisers in 2022, which represented 8% of nitrogen fertilisers and 11% of phosphate fertilisers on a global perspective.“We (GCC) export 95% of our output to global market. This generated a revenue to the tune of $14bn in 2022. We produce 152mn tonnes of chemicals and petrochemicals in the region, of which 23% by volume is fertiliser.”Asked about the challenges being faced by the industry in the region, al-Sadoun noted, “There are challenges. Logistical issues are there, which are steadily increasing due to regulations related to emissions. We are working closely with technology producers to reduce greenhouse gas (GHG) emissions, while we expand our production.“This is a requirement, which needs significant investment. We need (really) the governments to support the industry to continue its sustainable growth in the region. That’s a challenge. It is doable, but.”Al-Sadoun said, “With the world population projected to exceed 9.8bn people in 2050 and 11.2bn in 2100, more pressure is being added on our finite natural resources. Agri-nutrients play an essential role in helping to grow more food with less resources. As major producers and exporters of agri-nutrients globally, our region alone helps to feed over 200mn people globally. Therefore, our role in the global food chain is essential.He added: “The future of agri-nutrients will require us to adapt food security strategies to meet mounting demand. It will require us to consider the impact of climate change and strike a balance between the health of our environment and sustainable, profitable business. “We must also optimise the agri-nutrients value chain, while reducing carbon emissions, and play an active role in mitigating the climate impact of agriculture through the implementation of sustainable practices, education and collaboration.”

A part of the Ras Laffan Industrial City (file). Qatar remained the top LNG exporting country among GECF members and among top three globally in August, according to the Doha-headquartered Gas Exporting Countries Forum.
Business
Qatar remains top LNG exporter, globally and among GECF member countries

Qatar remained the top LNG exporting country among GECF members and among top three globally in August, according to the Doha-headquartered Gas Exporting Countries Forum (GECF).In August, the top LNG exporting countries were the US, Australia and Qatar, GECF said in its latest monthly report.Global LNG exports jumped by 4% (1.29mn tonnes) y-o-y to reach 33.23mn tonnes in August, driven by increased shipments from both GECF and non-GECF countries, offsetting weaker LNG reloads. Non-GECF countries' share of global LNG exports grew from 50.2% in August 2022 to 51.7% in August this year, while GECF member countries' share dropped from 48.1% to 47% during the same period, due to stronger growth in non-GECF exports.Additionally, LNG reloads' contribution to global exports decreased from 1.7% to 1.3%.From January to August, cumulative global LNG exports grew by 3.9%, totalling 271.44mn tonnes, GECF noted.Last month, LNG exports from GECF member countries and observers reached 15.62mn tonnes, representing a y-o-y growth of 1.7%, equivalent to 0.26mn tonnes.This notable increase was primarily driven by Algeria, as well as Angola, Malaysia, and Mozambique.In contrast, LNG exports declined in Egypt, Equatorial Guinea, Nigeria, Norway, Peru, Qatar, Russia, Trinidad and Tobago and the United Arab Emirates.Between January and August this year, the cumulative LNG exports from GECF member countries increased by 1.4% y-o-y, reaching a total of 131.1mn tonnes.Last month, LNG imports in the Mena region expanded by 28% (0.24mn tonnes) y-o-y to reach 1.12mn tonnes.The higher LNG imports were driven mainly by Kuwait and the United Arab Emirates.Between January and August, Mena’s cumulative LNG imports were down slightly by 0.5% (0.03mn tonnes) y-o-y, reaching 5.06mn tonnes.The hotter-than-usual weather in August increased Kuwait's electricity demand, requiring additional LNG imports.The total number of LNG export cargoes fell by 3% m-o-m in August, reaching 493. After the first eight months of the year, the total number of shipments was 4,139.This represented a 1% increase, or 38 cargoes, compared with the same period in 2022.Over the eight months of 2023, there have been notable increases in cargo shipments from the US (55), Algeria (31) and Norway (28), when compared with the same period in 2022.On a relative basis, Norway has recorded a 140% increase in cargo deliveries during the eight months of 2023, in contrast to the same period one year ago.The next highest percentage increases were observed in Algeria (22%) and Angola (19%).In August 2023, the spot charter rate for steam turbine LNG carriers gained 39% m-o-m, to reach an average of $59,900 per day.This price was 70% greater than the August 2022 levels and is $20,800 per day higher than the five-year historical average for this vessel class.Regarding the other segments of the LNG carrier fleet, both TDFE and two-stroke vessels observed increases in the spot charter rate as well.For TDFE carriers, the spot charter rate rose by 42% m-o-m to reach $94,600 per day. Similarly, for two-stroke carriers, the spot charter rate rose by 33%, reaching $121,500 per day.The daily spot charter rate for steam turbine LNG carriers remained relatively unchanged in July indicating that the market is now tightening.As expected during this time of year, the number of vessels which are being taken out of rotation to be used as floating storage around Europe is increasing.In addition to this, the tensions surrounding potentially prolonged strikes at LNG facilities in Australia have been reflected in spikes in Asian LNG prices.This development, along with the high gas storage levels in Europe, has fuelled the arbitrage, leading to increased cross-basin flows from the Atlantic to the Pacific basin.The average price of the leading shipping fuels increased by 9% m-o-m in August 2023, to reach $610 per tonne. This price was 20% lower than one year ago, GECF noted.

Gulf Times
Business
Ammonia and urea dominate GCC agri-nutrient market; account for 75% of region’s total market share: GPCA

Ammonia and urea dominate the GCC agri-nutrient market, accounting for 75% of the region’s total market share, the Gulf Petrochemicals and Chemicals Association (GPCA) said in a report.In 2021, GCC agri-nutrient production amounted to 34.3mn tonnes, constituting 17.2% of total global production, GPCA noted.Agri-nutrients (fertilisers) represent a substantial part of the GCC chemical industry, and play a crucial role in the GCC’s road to sustainability and food security, according to GPCA.However, with an increased push towards sustainability and carbon neutrality, Carbon Capture, Utilisation and Storage (CCUS) is in the spotlight as a potential solution to significantly reduce emissions in various industries, including agri-nutrients.Amidst a global effort to achieve carbon neutrality by mid-21st century, CCUS is gaining global attention as the basis technology for reducing GHG emissions and decarbonising industrial processes.In its most simplified terms, in CCUS, the CO2 emitted during operations is captured and either re-utilised for other CO2 requiring processes, or stored.In an agri-nutrient specific example, the carbon captured from ammonia production could be re-used in subsequent urea production.According to the International Energy Agency (IEA) (2021), the cost of CCUS-equipped agri-nutrient production is approximately 20%-40% higher than that of its unabated alternatives.However, because costs differ per region, a GCC specific analysis is required to assist regional producers and decision-makers.A GPCA research paper has presented a cost-comparative analysis of current and future carbon capture in the GCC to determine whether agri-nutrient producers would economically benefit from incorporating CCUS mechanisms into production, or whether buying CO2 from existing capture sites is more cost-effective.Agri-nutrient production is not a heavily emitting industry, it said. In fact, globally, agri-nutrient production only accounts for less than 2% of total emissions, according to leading research institution.

People near the Nigeria National Air flight at the Nnamdi Azikwe International Airport in Abuja (file). Infrastructure constraints, high costs, lack of connectivity, regulatory impediments, slow adoption of global standards and skills shortages affect the customer experience and are all contributory factors to African airlines’ viability and sustainability.
Business
Blocked funds remain a drag on African aviation growth

Africa has a solid foundation to support the case for improving aviation’s contribution to the continent’s overall development.Pre-Covid, aviation supported 7.7mn jobs and $63bn in economic activity in Africa, and projections are for demand to triple over the next two decades.Africa accounts for 18% of the global population, but just 2.1% of air transport activities including cargo and passenger segments. Africa faces several challenges in its aviation industry.Infrastructure constraints, high costs, lack of connectivity, regulatory impediments, slow adoption of global standards and skills shortages affect the customer experience and are all contributory factors to African airlines’ viability and sustainability. The continent’s carriers suffered cumulative losses of $3.5bn during the 2020-2022 period.Moreover, the International Air Transport Association (IATA) estimates further losses of $213mn in 2023.Another major challenge faced by African aviation is the rapidly rising levels of blocked funds, which are a threat to airline connectivity in the continent.Currently $1.5bn in airline funds remain blocked across the continent.That said, since 2018, a significant amount of blocked funds have been repatriated from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through working with the respective governments.“Blocked funds have reached a critical point in Africa,” pointed out Kamil al-Awadhi IATA’s vice-president (Africa and the Middle East).“Every penny counts for the airline industry. By failing to pay their bills for air transport, these governments (in Africa) are putting industry in a tighter position. Airlines pulling out (of Africa) reduces connectivity, leads to higher ticket prices, affects investor confidence and results in the collapse of the domestic travel agency businesses,” al-Awadhi noted.Blocked funds refer to money held by governments, often as a result of regulatory requirements or economic policies, which prevent airlines from freely accessing or repatriating their earnings from certain countries including many in Africa.Obviously, blocked funds severely impact an airline's cash flow. When a significant portion of their revenue is locked in a foreign country, it limits their ability to cover operational expenses, invest in new equipment, or expand their services.When funds are blocked, airlines find themselves in a financial bind, especially if they are unable to convert their earnings into a usable currency. This leads to reduced profitability, delayed payments to suppliers, and difficulties in meeting financial obligations.Blocked funds hinder an airline's ability to maintain and upgrade its fleet. This results in delayed maintenance schedules, reduced safety margins, and decreased competitiveness in terms of service quality.Without access to their earnings, airlines may find it challenging to invest in new routes, purchase additional aircraft, or expand their services in the affected countries. This limits their ability to tap into potentially lucrative markets.Prolonged blocking of funds leads to a serious financial crisis for airlines, potentially pushing them towards bankruptcy. The inability to meet financial obligations or invest in critical areas of operation will have severe consequences for an airline's viability.Worse still, airlines face uncertainty regarding when or if they will be able to access their blocked funds. This lack of clarity often makes it difficult to plan for future and make strategic business decisions.Recently, IATA launched ‘Focus Africa’ to strengthen aviation’s contribution to Africa’s economic and social development and improve connectivity, safety and reliability for passengers and shippers.This initiative will align private and public stakeholders to deliver measurable progress in some key areas such as safety, infrastructure, connectivity, finance and distribution, sustainability and future skills.At the IATA’s World Air Transport Summit in Istanbul in June, IATA’s Director General Willie Walsh noted: “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets.“Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

HE the Minister of Environment and Climate Change Sheikh Dr Faleh bin Nasser bin Ahmed bin Ali al-Thani delivering opening remarks at the two-day ‘Workshop on Article 6 of the Paris Agreement and Climate Finance Mechanisms’ on Tuesday. Picture: Shaji Kayamkulam
Qatar
Aligning with carbon market initiatives 'important' for Qatar: Sheikh Dr Faleh

HE the Minister of Environment and Climate Change Sheikh Dr Faleh bin Nasser bin Ahmed bin Ali al-Thani has stressed the need for Qatar to ensure that it aligns with international carbon market initiatives. In his opening remarks at the two-day ‘Workshop on Article 6 of the Paris Agreement and Climate Finance Mechanisms’ on Tuesday Sheikh Dr Faleh noted, “We must build the structures and capacities needed to efficiently engage in international carbon markets to achieve this.”A “well-functioning” framework and strategy for the implementation of a carbon market mechanism is therefore essential, he said. The minister said it is obvious that the public sector has an important role to plan in climate mitigation. “However, it is also of highest importance that we engage the private sector in the climate transition and not least ensure that they can utilise the opportunities associated with Article 6.”Despite some progress, it is known that the world faces incredible climate change challenges. Scientists warn that a 2°C rise of warming above pre-industrial levels will be exceeded during the 21st century, unless we achieve substantial reductions in greenhouse gas emissions.He said many countries are looking for ways to reduce greenhouse gas emissions and develop carbon markets and climate finance mechanisms as a tool to reaching this goal.“This workshop aims to feed into an inclusive process of developing an appropriate carbon market strategy for the State of Qatar and attempts to ensure that all relevant actors are well informed and updated on the latest developments of the international carbon markets.“For this purpose, we have invited highly qualified experts, both from Qatar and from all over the world, to participate at this workshop and sharing insights and knowledge on recent Carbon Market developments.” Carbon markets, the minister highlighted, “are not something new”. The concept was introduced in the USA in the early 1990s. The notion was internationally recognized in the Kyoto Protocol, which was signed in 1997 and extended during COP18 in Doha in 2012. The Kyoto Protocol introduced the concepts of project-based mechanisms and emissions trading, known as the Joint Implementation (JI) and the Clean Development Mechanism (CDM).To meet the commitment of the Kyoto Protocol, at the time, the European Union and its member states implemented the first regional Emissions Trading System (ETS) in 2005. The EU ETS remains the biggest carbon trading scheme in the world until today.In 2015, the Kyoto Protocol was replaced with the Paris Agreement. Article 6 of this agreement introduced the concept of international carbon market approaches.The concept allows countries to voluntarily cooperate with each other to achieve emission reduction targets set out in their Nationally Determined Contributions (NDCs).Carbon trading is rapidly growing, with many new initiatives currently being launched around the world. In fact, according to the World Bank, more than two thirds of the world’s countries are planning to include carbon markets mechanisms as part of their Nationally Determined Contributions (NDCs).Aside from the European and US trading systems already mentioned, China, South Korea, UK, and the United Nations already have functioning trading schemes in place.“I believe that this workshop gives us a good starting point for a collaborative process and hope that this workshop serves as a great opportunity to start our process,” Sheikh Dr Faleh said and thanked its partner the Al-Attiyah Foundation for its expertise and knowledge on this very important topic. He also thanked all contributors for sharing their knowledge and insights.“I should finally take the opportunity to put our attention to the fact that COP28 meeting will be arranged in Dubai in early December this year. With Qatar having a strong presence, gathering with world leaders and climate elite for intensive discussions, including on climate finance, I believe this workshop will provide valuable insights for our participation,” the minister added.

Gulf Times
Business
Qatari crude oil prices average $80.83/b from January to August: QNBFS

Qatari crude oil prices, both Dukhan and Marine, increased by 7.7% to average $86.62/barrel in August, indicated QNB Financial Services (QNBFS) calculations based on Bloomberg data.This compares with $80.45/b in July, QNBFS said on Monday.Qatari crude oil prices averaged $80.83/b for the year 2023 as at month-end August, QNBFS said citing Bloomberg data.Qatar’s budget for the current fiscal is heading towards a surplus, probably higher than envisaged, as Qatari crude averaged $80.83 per barrel from January to August in place of the budgeted $65 per barrel for fiscal 2023.Earlier, the Ministry of Finance estimated the budget surplus at QR29bn for the entire 2023.Qatari crude (including Dukhan and Marine) averaged $83.61 per barrel in January this year, $83.52/b (February), $75.80/b (March), $84.59/b (April), $76.13/b (May), $75.94/b (June), and $80.45/b (July).In the first quarter (Q1) of this year, Qatar already generated budget surplus of QR19.7bn, the Ministry of Finance revealed in June.In its briefing on the actual data of Qatar's budget in Q1 of 2023, the ministry said the total revenues for the quarter amounted to QR68.6bn, of which QR63.4bn were oil and gas revenues, while non-oil revenues amounted to QR5.2bn.The total expenditures in the same quarter of 2023 amounted to QR48.9bn, of which QR15.6bn was spent on salaries and wages and QR17.3bn on current expenses, while secondary capital expenditures amounted to QR1bn and major capital expenditures amounted to QR15.1bn, the statement noted.While releasing Qatar's budget for the fiscal year 2023, HE the Minister of Finance Ali bin Ahmed al-Kuwari had said the surplus would be directed towards paying off Qatar's public debt, supporting the reserves of Qatar Central Bank, and increasing the capital of the Qatar Investment Authority.He pointed out that an average oil price of $65 per barrel, on the basis of which the general budget for the year 2023 was built, is a conservative price adopted by the Ministry of Finance as part of its strategy to ensure the ability to allocate financial resources for existing commitments expected during the year, besides financing programmes and projects included in the national development strategy.

Powered by Commercial Bank’s payment acceptance solution, LuLu Group opened Qatar’s first and the region’s second cashier less check-out free store: LuLu Express at Hamad International Airport Metro Station.
Business
LuLu opens Qatar's 1st 'cashier less checkout store' powered by Commercial Bank’s payment solution

Powered by Commercial Bank’s payment acceptance solution, LuLu Group International opened Qatar’s first and the region’s second “cashier-less check-out free store: LuLu Express at Hamad International Airport Metro Station.Commercial Bank, in its pursuit of digital innovation, is “again leading the way in reshaping payment acceptance” in Qatar by “providing a shopping experience that is seamless and frictionless” for shoppers.Commercial Bank said the new convenience store provides fast, secure, and contactless check-out experience for customers.“What makes this store unique is being the first of its kind, where LuLu Express store has no check-out counters.“A customer can enter the store using his or her credit card, and then walk-out after finishing his shopping without any interaction with cashiers or self-checkout counters.“Every item picked by the customer at the store is automatically added to the customer’s digital shopping cart, and the purchase is completed when the customer leaves the store. There will be no queues, no cashier, and no waiting time at the counter to check-out either.”Speaking to Gulf Times following the launch of Qatar’s first check-out free store, Commercial Bank Group CEO Joseph Abraham said, “The opening of Qatar’s first cashier less store, which is powered by Commercial Bank’s acceptance solution, is a testament of the bank’s commitment to digital innovation to bring the best in class payment technology that meet the needs of merchants and customers alike.“We are delighted to co-operate with LuLu Express to introduce the first of its kind payment acceptance solution in Qatar, which not only makes shopping a fast and convenient experience for the customers, but also reshapes the payment solutions in the country. We are committed to providing customers in Qatar with the world’s latest innovations in digital experiences”.Abraham said Commercial Bank stays committed to “adapt and use cutting-edge technology to enhance customer experience.”“Transactions based on facial recognition will be a key feature of future banking. It is all about how we protect our customers in a convenient manner using technology. That will be an enhanced security feature that gives our customers' greater comfort and enhanced security.“LuLu has demonstrated the mindset of innovation. We are happy to partner with them,” Abraham noted.

Gulf Times
Business
LuLu Group, Commercial Bank synergy aligns with QNV 2030: Althaf

The opening of Qatar’s first and the region’s second cashier less, check-out free store - LuLu Express at Hamad International Airport Metro Station - aligns with “digital transformation”, which is a key component of the Qatar National Vision 2030, noted Dr Mohamed Althaf, Director, LuLu Group International.Speaking to Gulf Times yesterday, Althaf said the “store is a new concept in that it provides lot of data that helps LuLu better understand its customer needs and serve them.”“This is the first such store in our entire global network. Powered by Commercial Bank’s fintech team, it can accept all kinds of payments. Right now, only credit cards, both local and international, will be accepted. In future, we can do credit and debit cards, Apple payments and transactions based on biometric and facial recognition,” he said.Althaf noted, “This is more than a cashier less, check out free store. We already have the technology for self-checkout. It is available in LuLu outlets across Qatar.“For us, this is a learning experience. This technology helps us know more about machine learning and artificial intelligence and how it can influence our store layouts in future. Customer data gathered help us know more about our customers and their needs. I believe this is our digital lab.”He said the store can be accessed based on the Metro timings. The opening of more such stores across Qatar will be considered.LuLu’s inventory management will address issues such as replenishing stuff at the store, he said.“The technology leadership taken by Commercial Bank has made the implementation fast, and they are always in the forefront when it comes to adoption of the latest fin-tech”.“The synergy between LuLu Group, and Commercial Bank for digital transformation and knowledge-based economy are in the spirit of the Qatar National Vision 2030”, he added.The LuLu cashier-less experience is similar to convenience store concepts in the US. LuLu Express is equipped with multiple cameras mounted in the ceiling and are powered by a combination of computer vision and machine learning to follow the shopper’s movement inside the store.These cameras use accurate tracking technology to identify shoppers through their body structure, and they do not record any facial recognition or biometric data.Although cashier-less, the store will have staff who will help customers find items on the shelves, restock and perform other operational activities, in addition to answering queries addressing concerns if any.

“The main factors underpinning this rating are macroeconomic stability, the credible and well-established exchange rate regime, robust growth, very high GDP per capita, and a healthy, well-developed banking sector,” according to Oxford Economics.
Qatar
Qatar trade credit risk 'very low' by regional standards: Oxford Economics

Qatar’s trade credit risk, which is a measure of private sector repayment risk, is “very low” by regional standards, Oxford Economics has said in a report.Oxford Economics rated the country's trade credit risk at 3.0, compared with the regional average of 6.1.Risk scores are from 1 to 10, with 10 representing the highest risk, the researcher noted.“The main factors underpinning this rating are macroeconomic stability, the credible and well-established exchange rate regime, robust growth, very high GDP per capita, and a healthy, well-developed banking sector,” Oxford Economics noted.Higher oil prices will likely support bank liquidity, despite rising exposure to construction and real estate and persistent foreign funding risk.The sovereign credit risk score under its data-driven methodology is 3.0, the same as six months ago and well below the Mena average of 4.3.The score reflects very high per capita incomes, large government reserves, strong external finances, and political stability.The budget deficit in 2017 was temporary, returning to surplus in 2018. But it began to narrow again in 2019 and, given the slump in oil and gas prices, moved into deficit of 2.1% of GDP in 2020.The balance returned to surplus in 2021, and widened above 10% of GDP in 2022, due to higher oil and gas revenues.“We forecast it to average at 9% of GDP this year,” Oxford Economics said.In 2017, the main rating agencies downgraded Qatar to AA-/Aa3 in response to the regional dispute (blockade).“Given the restoration of ties and the improvement in public finances, the ratings are on an upward trajectory again, with S&P recently upgrading its rating to AA and Fitch and Moody's lifting the outlook from stable to positive,” Oxford Economics said.Under the researcher’s methodology, exchange rate risk is 1.8, unchanged from six months ago, but well below the Mena average of 4.2.“The stronger US dollar has supported the dollar-pegged Qatari riyal at QR3.64, and there is only a small chance of de-pegging even if policy co-ordination with other Gulf countries continues to suffer,” Oxford Economics says.The low risk score, it said, “reflects the authorities’ long-standing commitment” to the dollar peg, as well as large foreign exchange reserves.Risk rose in 2020 when the current account moved into deficit, but the score improved as the current account moved back to surplus in 2021, as exports recovered, and oil and gas prices improved from the lows in 2020.The surplus widened to over 26% of GDP in 2022 and will remain in double digits this year and next, Oxford Economics added.

Workers connect a Total tanker truck to an Airbus A350 passenger plane, operated by Air France-KLM, during fuelling with sustainable aviation fuel,   at Charles de Gaulle airport in Roissy, France. SAF is considered a critical component in reducing the aviation industry's carbon footprint and achieving sustainability goals.
Business
SAF production boost hinges on incentives, subsidies and tax breaks

Sustainable Aviation Fuel (SAF) is considered a critical component in reducing the aviation industry's carbon footprint and achieving sustainability goals..text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px;}@media only screen and (max-width: 767px) {.text-box {width: 30%;}}**media[73991]**SAF has clearly emerged as a key feature within the industry as the world aims to achieve ambitious climate targets.The airline industry’s biggest focus now seems to be on sustainable aviation fuel, which will be the biggest contributor to its targeted net zero carbon emissions by 2050.SAF represents a broad category of fuels derived from non-fossil sources, including advanced biofuels and e-fuels, offering a sustainable alternative to conventional jet fuel.Global trade body of airlines - International Air Transport Association (IATA) estimates that SAF could contribute approximately 65% of the emissions abatement necessary for aviation to achieve its goal of reaching net zero CO2 emissions by 2050.Airlines have continued to announce their SAF offtake agreements, reaching 41 publicly announced SAF offtake agreements and 18 non-binding agreements since 2022, including both memoranda of understanding (MoUs) and letters of intent.Those agreements represent a total blended SAF volume of around 26mn metric tonnes. Considering the current blending ratio of 30-40% SAF and 60-70% conventional jet fuel, the total volume of neat SAF in these offtake agreements can be estimated to be around 8-10mn tonnes.Among the total of 59 SAF offtake agreements, some 51 agreements are based on Biofuel SAFs from four pathways, namely Hydro-processed Esters and Fatty Acids (HEFA), HEFA Co-Processing, Syngas Fischer-Tropsch (Syngas-FT), and Alcohol to Jet (AtJ). The remaining eight are associated with E-Fuel SAF, derived from various power-to-liquid projects.Based on IATA’s data sources, in excess of 130 renewable fuel projects have been announced publicly by more than 90 producers in some 30 countries across the world.Each of these projects has identified commitments to producing SAF in their product slate. Adding a few more projects in the second quarter of 2023, these projects represent an estimated overall renewable fuel capacity of 57mn tonnes by 2029.Given a three to six year lag between project announcement and commercialisation, IATA says further capacity announcements for 2026 and beyond can be expected, leading to additional facilities and in turn SAF production.Earlier, International Air Transport Association unveiled a series of roadmaps aimed at providing step-by-step detailing of critical actions and dependencies for aviation to achieve net zero carbon emissions by 2050.These roadmaps address aircraft technology, energy infrastructure, operations, finance, and policy considerations leading to net zero.At a media event during the IATA AGM in Istanbul in June, IATA Director General Willie Walsh said: "SAF production is less than 0.1% of what we need for net zero. But the trend is positive. In 2022, SAF production tripled to 300mn litres. And while critics of our industry dismiss that figure as irrelevant, it’s important to remember that airlines used every single drop costing almost $350mn.“With the right supportive policies, reaching 30bn litres by 2030 is challenging but achievable. That would be about 6% of the 450bn litres annual production capacity we need in 2050. We think it will be the tipping point because achieving it will establish the trajectory needed to scale up for 2050.”On why the airline industry was not moving faster on the issue, he said, “The willingness of airlines to use SAF is definitely not the issue. As I have said, every drop of SAF ever produced has been purchased and used. The problem is insufficient production capacity to meet demand.“That’s why we must increase the number of pathways for SAF production and diversify feedstocks — of course while maintaining their sustainability credentials. Doing so will open production opportunities best suited to particular geographical locations.”Undoubtedly, the aviation industry has the roadmaps to achieve energy transition. The industry leaders have reiterated time and again that their commitment to net zero by 2050 is fixed and firm.But to get the job done, SAF production has to be boosted. But stepping up SAF production is a complex and multifaceted endeavour that requires the concerted efforts of governments, industry stakeholders, and the research community.Governments and regulatory bodies need to provide incentives, subsidies, and tax breaks to encourage SAF production.This may include mandates requiring airlines to use a certain percentage of Sustainable Aviation Fuel in their fuel mix, which will then create a guaranteed market for SAF producers.By addressing these key areas, the airline industry can certainly work towards a more sustainable and environment-friendly future.

Gulf Times
Business
Growth in remittances from GCC may shift to Africa, Central Asia: IMF

Growth in remittances from the GCC region could shift to Africa and Central Asia, the International Monetary Fund (IMF) said in a report.“Governments in the Gulf are starting to recruit fewer foreign workers as part of a push to employ more locals and are diversifying recruitment of foreign workers, targeting those from Africa and Central Asia,” IMF cited the reason in its report titled ‘Resilient remittances’.The report prepared by Dilip Ratha, a lead economist at the World Bank and an adviser to the Multilateral Investment Guarantee Agency noted: “The Gulf Co-operation Council countries are the second-largest source of remittances in US dollar terms but by far the largest when remittances are measured as a share of their GDP. The proportion of foreign workers in the Gulf often exceeds 70% of the population. Saudi Arabia and the United Arab Emirates are large sources of remittances for South Asia, North Africa, and Southeast Asia.”Remittances sent home by migrant workers provide vital income to millions of people in developing economies, the report said.A growing income gap between richer and poorer nations, demographic pressures, and changes to the planet itself will add to the number of people who migrate in search of economic opportunity. This will, in turn, fuel the flow of remittances for decades to come.According to official statistics, global remittances reached a record $647bn in 2022—three times official development assistance. In fact, remittances are worth more than that because many people send money through informal channels not captured by official statistics.Egypt’s remittance receipts are greater than revenue from the Suez Canal; Sri Lanka’s exceed tea exports; Morocco’s are larger than tourism earnings.India is the world’s largest recipient of remittances, the report noted. In 2022, it became the first country to receive more than $100bn in annual remittances. Mexico, China, and the Philippines are also large recipients.For smaller countries or those caught up in conflict, these transfers are especially vital. Money from migrants is worth more than one-fifth of GDP in Tajikistan, Lebanon, Nepal, Honduras, The Gambia, and a dozen other countries.“At times of crisis, remittances provide a financial lifeline,” the report noted.Migrant workers usually increase the sums they send home in the aftermath of a natural disaster, say, so that stricken relatives can buy food or pay for shelter. Remittances are often stable even if the source country falls into crisis.During the early stages of Covid-19, in 2020, for instance, remittances fell by just 1.1% — in a year when global income shrank by 3%.Migrant workers played a pivotal role in the economy during the pandemic, both as highly skilled doctors and nurses and as frontline delivery workers. The closure of money transfer operators during lockdowns disrupted remittance services, but people still sent money home through digital channels.Remittances recovered strongly and grew by almost 20% in 2021–22, it said.The United States is the largest source country for remittances, especially for Latin America and the Caribbean, the report said. Stricter border controls have trapped increasing numbers of migrants in transit countries, including in Mexico and Guatemala.A surprise result is an increase in remittance flows to transit countries as stranded migrants receive money from relatives. There’s a similar story on Europe’s borders, with more remittances going to trapped migrants in Morocco, Tunisia, and Turkiye, for example. These flows are having a positive impact on host economies, the report said.

A general view in Riyadh. Sustained economic growth and diversification agendas in GCC countries have given rise to increased sukuk issuance activity to support balance sheet growth, according to Moody’s.
Business
Qatar H1 sukuk volumes supported by $1.3bn issuance by government: Moody's

Qatar sukuk issuance was supported in the first half of the year by a $1.3bn issuance by the government, Moody's said in a report Monday.GCC sukuk issuance fell 33% to $29.8bn in the first half of 2023 compared with the year-earlier period, mostly reflecting a steep decline in Saudi Arabian sovereign volumes, Moody’s Investor Service noted.Despite the decline, however, the kingdom remained the leading contributor to GCC issuance activity in the first half of the year, with around 50% of total volume, it said.Oman was the only GCC country not to register any issuance activity during the period.Supportive hydrocarbon prices continued to strengthen the fiscal balances of hydrocarbon- exporting GCC sovereigns and will translate into budget surpluses this year, considerably reducing the need to issue sukuk.Unfavourable financing conditions and increased market volatility also reduced opportunities for sovereign actors to refinance debt or to prefinance expected borrowing needs.Long-term issuance by GCC corporate and financial institutions during the period followed an opposite trajectory to regional sovereign issuance, Moody’s said.Long-term volumes from corporates and banks rose threefold to a combined $12.6bn (H1 2022: $2.9bn), partly offsetting the decline in sovereign volumes.Sustained economic growth and diversification agendas in GCC countries gave rise to increased issuance activity to support balance sheet growth.On the corporate side, cross-border issuance made up the bulk of activity, with $7.4bn issued in the GCC, almost three times the volume for 2022 as a whole.High demand for sukuk instruments and current scarcity in the market offered opportunities for private-sector actors to issue, Moody’s said.Globally, sukuk issuance fell 28% to $66bn in the first half of 2023 from $92bn a year earlier, largely reflecting lower volumes from major sovereign issuers, most notably Saudi Arabia.Moody’s expects global sukuk issuance to decline for a third consecutive year in 2023 after peaking at $205bn in 2020.“We anticipate issuance of between $150bn and $160bn for the year as a whole, down from $178bn in 2022. Lower volumes from key sovereign issuers directly stemming from ongoing improving fiscal positions explain most of the decline we anticipate for this year.“In the GCC, as well as Southeast Asia, robust commodity prices associated with sustained economic growth have translated into stronger fiscal positions and lower issuance needs,” Moody’s said.Lower sovereign volumes contrast with stronger activity on the part of private-sector issuers, which returned to the market in the first half of the year despite unfavourable market conditions.A significant increase in private-sector volumes was driven by companies completing postponed issuances or seeking to refinance upcoming maturities, as well as first-time issuers looking to diversify their funding sources.Increasing appetite for sustainable instruments, encouraged by GCC governments ahead of the COP28 summit, also pushed several corporates and financial institutions to issue green sukuk.“Overall, we remain positive on the long-term prospects for sukuk. These instruments offer access to the Gulf region, where significant financial reserves and solid economic prospects are attracting investors in increasing numbers.“As sukuk markets in core Islamic countries become more mature and economies continue to develop, we expect the sukuk market's growth prospects to remain solid,” Moody’s noted.

A view of the Ras Laffan Industrial City, Qatar's principal site for the production of liquefied natural gas and gas-to-liquids (file). The hydrocarbon sector growth in Qatar eased to 4.1% from 4.8% previously, but remained the largest contributor to GDP (more than half).
Business
Qatar's economic activity to remain modest on 'expectedly steady' hydrocarbon output: NBK

Qatar's economic activity could remain modest on expectedly steady hydrocarbon output, National Bank of Kuwait said in its report released Monday.NBK’s 2023 growth forecast for Qatar remains unchanged from the May estimate, at 2%.In its report, NBK noted Qatar’s economy expanded by 2.7% year-on-year (y-o-y) in first quarter (Q1, 2023), down from the “exceptional” World Cup-driven growth of 6.2% in Q4, 2022, and below the consensus forecast of 4.2%.The “slower” expansion was mostly on a marked deceleration in non-oil growth, which plunged to 1.9% y-o-y from 7% in the previous quarter, with the manufacturing (11%), motor vehicle repair (9.1%), transportation and storage (17%), and accommodation and food (17%) components expanding the most.Meanwhile, hydrocarbon sector growth eased to 4.1% from 4.8% previously, but remained the largest contributor to GDP (more than half).Looking forward, economic activity could remain modest on expectedly steady hydrocarbon output and as non-oil activity moderates post World Cup amid lower visitor numbers, softer credit growth, and higher interest rates; NBK said its 2023 growth forecast for Qatar remains unchanged from the May estimate, at 2% from 4.8% in 2022.The report also noted that Brent crude snapped a two-week losing streak on September 1, closing up at its highest level since last November at $88.6/barrel (+4.8% week over week) amid expectations of tighter supply.“All the indications are that Saudi Arabia will extend its voluntary 1mn barrels per day (bpd) production cut, in effect since July, into October, while Russia could also reduce its exports further after Russian deputy prime minister promised to unveil a new OPEC+ supply cut deal this week,” NBK said.In the US, commercial oil inventories fell for a third consecutive week (crude stocks have declined in five of the last six weeks), by 8mb in the week ending August 25, on higher domestic (refinery throughputs) and overseas demand (exports).“Prices were little changed this morning (September 4) in Asian trading,” NBK noted.