Latest news with #AlinaSlyusarchuk
Reuters
24-04-2025
- Business
- Reuters
Most Gulf Cooperation Council economies to grow at slower pace in 2025 than thought earlier: Reuters poll
BENGALURU, April 24 (Reuters) - Most Gulf Cooperation Council (GCC) economies will grow at a shallower pace this year than predicted earlier amid rising risks of a global slowdown despite higher oil production, according to a Reuters poll. The region's economies are unlikely to be significantly affected by flip-flop U.S. tariff policies but a global economic downturn and its impact on oil demand, the region's primary revenue earner, could hamper growth. Brent crude prices hit their lowest levels this month since the pandemic and are expected to remain subdued this year on weaker demand and higher supply. The Organisation of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, were expected to increase oil output next month and may extend it to June. The International Monetary Fund (IMF) recently lowered its growth forecast for Saudi Arabia, the region's largest economy, and flagged headwinds for the broader region. The April 9-24 Reuters poll of 19 economists forecast the Saudi economy will expand 3.9% this year, a minor downgrade from 4.0% in a January poll. "As global recession fears rise, a lower oil price would also weigh on Saudi exports and fiscal outlook for the oil price has deteriorated considerably," noted Alina Slyusarchuk, chief CEEMEA Economist at Morgan Stanley. "Given the weakening outlook for both the volumes and the prices of Saudi Arabia's key exports, we see downside risk to our growth forecast." The United Arab Emirates economy will grow 4.5% this year, the poll median showed, a downgrade from 5.0% predicted in January but still the fastest in the region. In the rest of the GCC, growth expectations for Kuwait, Qatar, Oman and Bahrain this year are projected at 2.5%, 2.7%, 2.8% and 2.8%, respectively. "The unexpected OPEC+ decision to boost production and fears of a global slowdown owing to sweeping U.S. tariffs carry major implications for the region," wrote economists at Citi. "We recognize that our 2025 forecasts are subject to an unusually high degree of uncertainty due to the challenging oil market dynamics and the ongoing paradigm shift in the global economy." Inflation, which has remained stable in the region, is forecast to range between 1.2% and 2.5% this year, with the lowest in Oman and highest in Kuwait. Saudi Arabia and UAE's inflation was expected to average 2.0%, with Qatar and Bahrain at 1.5%. (Other stories from the April Reuters global economic poll)
Reuters
02-04-2025
- Business
- Reuters
Bank of Israel to keep rates unchanged as Gaza conflict resumes
Summary Companies Rates decision due on Monday at 1300 GMT All 14 economists polled by Reuters see no move this month Inflation rate slipped to 3.4% in Feb, but above 1%-3% target Israel economy grew 0.9% in 2024 as Gaza war weighed JERUSALEM, April 2 (Reuters) - The Bank of Israel is expected to leave short-term interest rates unchanged at a policy meeting next week, likely staying cautious after the Israeli military's resumption of strikes in Gaza and Lebanon. All 14 economists polled by Reuters said they expected the central bank to keep its benchmark rate (ILINR=ECI), opens new tab at 4.5% when the decision is announced on Monday at 4 p.m. (1300 GMT). The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. While February inflation data were lower than market expectations, "an increase in geopolitical and domestic tensions will keep the Bank of Israel on the prudent side," said Morgan Stanley economist Alina Slyusarchuk, expecting the key interest rate to end 2025 at 4%. Israel's annual inflation rate eased to 3.4% in February from 3.8% in January but remained about its 1-3% target. Inflation has stayed high due to price gains on a host of goods including water and electricity, as well as some taxes that rose at the start of 2025. The government also partly blames war-related supply issues for sticky inflation. Hurt by the wars against Hamas in Gaza and Hezbollah in Lebanon, Israel's economy grew 0.9% in 2024 and is expected to grow 3.4% this year, according to OECD estimates issued on Wednesday. It also projects inflation at 3.7% this year and recommended policymakers hold the line on rates until price pressures were contained. Central bank officials have said they expect inflation to ease in the second half of the year and hope to lower rates once or twice in 2025. But "markets have postponed the expected timing of the next rate cut in light of elevated risks," said Bank of Israel Chief Economist Victor Bahar, citing Israel's rising risk premium. He noted that the derivatives market is only pricing in one rate reduction this year. Israel's high risk premium had fallen sharply since Israel agreed a U.S.-backed ceasefire deal in January with Palestinian militant group Hamas, whose attack on October 7, 2023 triggered the war, but has risen again as the ceasefire deals could be in jeopardy. After two months of relative calm, Israel resumed airstrikes on Gaza last month and sent ground troops back when the two sides failed to agree on the next stage of the ceasefire. On Wednesday, Israel announced a major expansion of military operations in Gaza. An Israeli airstrike on Tuesday killed four people including a Hezbollah official in Beirut's southern suburbs, further testing a shaky ceasefire between Israel and Iran-backed Hezbollah in Lebanon.
