Economic Outlook
Egypt will be provided with petroleum products worth 8.7 BN USD from the United Arab
Emirates over a year starting in September. Egypt is struggling to control the increasing budget
deficit and the growing energy demands that had resulted in daily electricity cuts around the
country with population of 86 MM. Since the ousted of President Morsi last year, the Oilproducing Gulf countries have come to Egypt’s aid since then. The petroleum products would
be provided as a grants and the rest would be as a credit agreement that would be repaid on
installments. Egypt has been provided with more than 20 BN USD in grants, loans and
petroleum product by the united Arab of Emirates, Saudi Arabia and Kuwait, since the ousted of
Morsi last year. Fifth of the state budget were fuel subsidies that cost Egypt’s government
around 15 BN USD a year. However the government reduced the energy subsidies and
increased the prices by around 70 % in July.
In Oman, Quasi-money (savings and time deposits, certificates of deposits issued by
commercial banks, margin deposits and foreign currency denominated deposits in Omani Rials)
witnessed a growth of 8.5% according to the report issued by the central bank of Oman
(CBO).The share of quasi-money declined to be 63.9% in June 2014, as compared to 68.1% a
year ago. Narrow money stock (M1) grew sharply by 30.9 % as of the end of June 2014, when
measured on year-on-year basis, due to an increase in currency with public by 16.8% and also
due to increase in demand deposits by 36.2 %. In addition to that there is an increase of 15.7 %
in broad money supply M@ (which is M1 plus quasi –money) which increased to be 13,046.6
MM OMR at the end of June 2014, as it was last year 11,281.0 MM OMR. The interest rate of
CBO certificate of deposits of 28 days maturity declined slightly to be 0.123% other than
0.130% last year.
The Islamic banks in Qatar outpaced conventional banks in the country in terms of growth in
net profit during the second quarter of 2014 (Q2 14). Qatar Islamic Bank (QIB) reported a 15%
YoY bottom-line growth in Q2 of 2014, mainly due to improvement in top-line as well as fee
income. Top-line growth was backed by strong financing growth as loan books of banks in
Qatar grew the most in the region, by registering 15.4% growth on year-on-year basis, followed
by the banks in Saudi Arabia (9%), UAE (4.8%) and Kuwait (4.6%). Due to stable growth in
loan book, net interest income (NII) of GCC banks rose 4.3% YoY. Qatar's NII grew by 2.9%.
NII growth was led by UAE-based banks (8.2% YoY), followed by those in Saudi Arabia
(7.3%).
During the second quarter of 2014 Saudi Arabia recorded a major increase in the value of
awarded contracts which reached 84.9 BN SR. According to a local bank report, this is a strong
recovery from the previous quarter .The main sectors that constituted the majority of spending
according to the national commercial bank claim in its construction contracts index is the oil
and gas sectors which accounted for 60% of the value of awarded contracts, and those were the
same sectors that dominated the majority of the value of the awarded contracts in the first half
of 2014 representing 49% of contracts. And also the roads sectors represented with 9% of the
value of the contracts. In April the residential real estate sector had three contracts worth 1.5 BN
SR awarded by the ministry of housing. Bin jarAllah establishment for the development of
infrastructure works in Khamis Mushait was awarded the largest contract. The 1.3 BN SR
contract will be completed by the second half of 2017.
The Dubai education authority has announced the opening of 11 new schools for the academic
year 2014-2015 due to the growing student population in Emirates. Eight out of the eleven
schools will follow the British curriculum, two schools will be combined of international
baccalaureate (IB), two will follow Indian curriculum and one will adopt the Canadian
curriculum. According to the Knowledge and Human Development Authority (KHDA) in May
reported that a total number of new schools were eight and there are three more were added to
the list. The total number of private schools in Dubai will be 169 according to the statistics
provided by the KHDA, and accordingly over 243,700 students have enrolled in private schools
for the academic year 2014/2015. 23,000 student places were provided by the new schools.
There will be 360,000 schools seats available by the year 2020 to meet Dubai’s rapid growth
and demand for high-quality education.
The Central Bank of Egypt (CBE) will return 2.5 BN USD in deposits to Qatar this year. The
CBE governor claimed that Egypt is ready to pay them as scheduled, at the beginning of
October 500 MM USD will be settled and there will be another settlement of 2 BN USD due at
the beginning of November. The relation between Qatar and Egypt deteriorated after the ousted
of Islamist president Morsi, since Qatar had been a strong supporter who lent or gave Egypt
around 8 BN USD during the year Morsi was in power. Egypt had returned 3 BN USD to Qatar
between July 2013 and March 2014. According to the Egyptian finance minister Egypt external
debt was 45.3 BN USD in March 2014. The % of foreign debt to GDP stood at 15.5%.
Egypt’s permanent representative at the UN, expressed his concern over the situation in Iraq,
Libya and Palestine, also condemning all forms of terrorism and human rights violations and
that the international community should give “urgent priority” to stop the escalating conflicts in
Syria and Iraq. He affirmed Egypt’s commitment to engage in a positive, objective and
constructive dialogue with international human rights organizations.
Two British-Nepalese human rights researchers who
were held by Qatari authorities for questioning on
their work in the country were released. Krishna
Upadhyaya travelled to Doha with colleague Ghimire
Gundev, 36, on August 27 to film a documentary on
the treatment and working conditions of Nepalese
laborers in Qatar as they prepare to host the 2022
World Cup.
