It would possibly take until the last years of the century for Gaza’s economy to return to pre-conflict levels if hostilities in the Palestinian enclave cease immediately, the U. N. industrial framework said in a report released Wednesday.
Israel’s offensive in Gaza in the wake of attacks by Hamas gunmen on Oct. 7 have killed more than 26,000 people, according to local authorities, and decimated infrastructure and the livelihoods of its 2.3 million inhabitants.
The United Nations Conference on Trade and Development said the clash caused a 24% contraction in Gaza’s GDP (gross domestic product) and a 26. 1% decline in GDP consistent with capita by 2023.
UNCTAD said that if the military operation were to end and reconstruction to start immediately – and if the growth trend seen in 2007-2022 persisted, at an annual average rate of 0.4% — Gaza could restore its pre-conflict GDP levels in 2092.
In the best-case scenario, in a situation where GDP could grow by barely 10% per year, Gaza’s GDP, in capita terms, would still have to wait until 2035 to reach 2006 levels, before Israel imposes a land, sea and air blockade consistent with 2007, raising security concerns.
“It will take until 2092 for Gaza to return to its 2022 level, which is not a wise position for Gazans to be in,” said Rami Allazeh, an economist working in the occupied Palestinian territories at UNCTAD.
“The main conclusion of this report is that the point of destruction we are witnessing in Gaza is unprecedented. It will take a lot of efforts on the part of the foreign network for the reconstruction and recovery of Gaza. “
UNCTAD said that, after Israel’s last military intervention in Gaza in 2014, the enclave would need about $3. 9 billion. These desires would be significantly higher after the existing conflict, he adds.
“Given the level of destruction and intensity of damage we are witnessing lately in Gaza, and the fact that the army operation is still ongoing, the amount for Gaza recovery will be several times greater than the $3. 9 billion needed. ” after the 2014 war. Allazeh said.
Gaza’s economy had been in a shambles even prior to the conflict due to the Israeli economic blockade, with the enclave’s economy contracting 4.5% in the first three quarters of 2023, according to UNCTAD estimates.
Two-thirds of the population lived in poverty and 45 percent of the labor force was unemployed before the conflict. By December, the unemployment rate had reached a staggering 79. 3 percent, UNCTAD said.
“I don’t think the foreign network or the other Gazans can withstand decades of humanitarian catastrophe,” Allazeh said.
“Gaza wants to be part of the timetable of progress rather than being treated as a humanitarian case. “
Morocco’s annual trade deficit contracted by 7.3% to 286 billion dirhams ($28.6 billion) in 2023, helped by a drop in energy imports and higher tourism revenue, the foreign exchange regulator said in a monthly report.
Imports declined year-on-year by 2. 5% to 715 billion dirhams, while exports rose by 0. 2% to 429 billion dirhams, the regulator said, adding that remittances from Moroccans abroad and exports from the auto industry also contributed to the industry’s deficit.
Morocco’s energy imports dropped 20.4% to 122 billion dirhams after a drop both in demand and prices in the international market.
Wheat imports stood at DH 19. 3 billion, up 25. 3%, while imports of ammonia, key to fertilizer production, fell by 58% to DH 8. 8 billion.
Morocco, which has the world’s largest phosphate reserves, reported a 34% drop in its exports of minerals and derivatives, fertilizers, to 76 billion dirhams.
Morocco, home to Stellantis and Renault production plants, saw exports from the automotive sector increase by more than 27% to a record 141 billion dirhams.
Tourism revenue also reached new highs, jumping 11. 7% to Dh104 billion, from a record Dh14. 5 million in the country last year.
Key to the influx of foreign currency to Morocco, remittances from Moroccans reached a record amount of 115 billion dirhams, up 4% compared to 2022.
Gulf Air, Bahrain’s national carrier, on Saturday unveiled its first flight to AlUla International Airport, from where the airline will operate direct Bahrain-AlUla flights twice a week, from February 3 to March 6 and from April 10 to 27. aboard the Gulf Air A320neo aircraft.
The Royal Commission for AlUla (RCU) aims to expand air connectivity to local and foreign destinations and transform AlUla into a global logistics hub in northwestern Saudi Arabia.
Vice President of Destination Marketing and Management Office at RCU Rami Almoallim said: “We are pleased to welcome new visitors on their journey to AlUla, which offers a cultural and tourism experience.”
He added that AlUla’s inclusion among Gulf Air’s most sensible seasonal destinations for the current year is a testament to the tourist appeal of this historic site.
“It also contributes to our efforts to facilitate access to AlUla as a destination for direct foreign flights from nearby foreign air hubs,” he added.
In recent years, several projects have been carried out at AlUla International Airport for its services. The airport joined the list of foreign airports in March 2021. The airport’s total domain has been expanded to nearly 2. 4 million square meters and the airport’s flight deck can accommodate up to 15 aircraft at a time.
The improvement of flight operations and the progression of the airport’s infrastructure align with AlUla’s goals of welcoming two million visitors annually until 2035, a pioneering style of practical and sustainable tourism strategy.
Saudi airlines have expanded the reach of their flights to AlUla International Airport, connecting it with Europe by operating flights to Paris and adding foreign destinations, from Dubai, Doha and Cairo.
Egypt’s Suez Canal Authority reported that revenues for January 2024 witnessed a massive decrease of 46% compared to the same period in 2023, from $804 million to $428 million.
The authority’s chairman, Osama Rabie, said in televised remarks that 1,362 ships passed through the canal in January 2024, up from 2,155 ships in January 2023, a low of 36%.
Rabie noted that this is the first time the Suez Canal has gone through a crisis, adding that the Authority has held meetings with shipping agencies and companies to find a solution.
He said this resulted in a consensus that the Suez Canal direction is the best, shortest and safest maritime direction and that the Cape of Good Hope is an unsustainable navigation direction.
Rabie noted that ships are delayed by between 12 and 15 days, depending on the ship’s speed and weather conditions, due to the use of select routes to the Red Sea and the Suez Canal, which disrupts global chains.
The official said the Suez Canal factor affects the whole world, only Egypt.
He expects traffic through the channel to increase once the existing crisis is over to compensate for source chains.
The International Monetary Fund (IMF) recently warned of escalating tensions in the Red Sea region and its effects on industry and shipping costs.
The Fund said in a report adding an update on the regional economic outlook in the Middle East and North Africa (MENA) that after ships arrived under drone strikes in the Red Sea and Gulf of Aden, many large shipping companies moved their shipments. other maritime routes, with potential implications for global supply chains and commodity trade, as well as higher insurance costs.
It warned that shipping costs could rise if tensions persist after some shipping companies moved more of their industry to longer choice routes, which would increase fuel and operating costs.
Lebanon’s Central Bank opened for monthly withdrawals of money a segment of deposits that were “not eligible” for full collection, according to the existing government’s description.
This was accompanied by a resolution obliging operating banks to adopt the exchange rate announced on the electronic platform when preparing periodic budget statements and moving financial assets and liabilities denominated in foreign currency.
The two measures were announced in circulars signed by Acting Governor Wassim Mansouri, numbered 166 and 167 respectively, and issued in combination over the weekend.
According to sources close to the matter, this is a double preventive measure that requires new projects in the Ministry of Finance after the recent approval of the general budget.
A senior banking official contacted via Asharq Al-Awsat said the features of the executive and legislative roadmap for the desired rescue and recovery plan may continue to take shape after five years of persistent currency and banking crises.
The circular, issued on Saturday, allows monthly withdrawals of $150 from secure accounts opened through depositors after Oct. 31, 2019, to convert their Lebanese pound savings into dollars.
According to the bank official, this resolution will make it possible to achieve relative equality among depositors.
Mansouri was keen to begin the circular with the phrase: “Without prejudice to the right of depositors to recover their deposits.” The circular will be effective starting February until mid-2024, with the possibility of renewal.
Unlike previous decisions, both measures were approved after consultations with the Association of Banks.
The World Bank has warned of a global supply chain crisis if attacks by Iranian-backed Houthi militias on ships in the Red Sea continue for another three months, saying it will be a crisis similar to what the world has experienced during the coronavirus pandemic. .
In its report on the diversion of ships from the Suez Canal and fears of a new supply chain crisis, the World Bank showed that the global container shipping industry is most likely to absorb the capacity surprise caused by the attacks, as demand is weak in January. and February.
However, if attacks persist in March and April, when the global industry reports a seasonal uptick, capacity constraints may cause a chain-of-origin crisis like the one in 2021-2022.
The crisis happened when container shipping proved unable to support the rebound of international trade starting in late 2020.
The World Bank recalled that COVID-19 closures and a lack of staff at ports have forced ships to wait days or even weeks to unload their cargo, resulting in fewer ships to transport goods.
The report claims that the festival for places on ships sent there has skyrocketed; accumulation increased 8-fold on routes between Asia and Europe or North America compared to 2019.
The source of tensions in the chain of origin differs today, but the end results may be similar.
Longer distances and higher fares
According to the World Bank, major carriers, including Maersk and Hapag-Lloyd, have suspended operations through the Suez Canal to the Red Sea and are diverting their ships around the Cape of Good Hope, adding 3,000 to 3,500 nautical miles and seven to 10 days for a typical adventure between Europe and Asia.
The extra distance could absorb from 700,000 to 1.9 million standard containers of shipping capacity, depending on the estimate.
This higher figure is comparable to the locked capacity of 2021 at the height of the COVID crisis, as measured through the World Bank’s Global Supply Chain Stress Index.
The additional prices of circular trips around the Cape of Good Hope, which add up to a million dollars in fuel for a circular trip, result in higher shipping rates.
Maersk adds to its books a “transit interruption surcharge” of $200 per TEU (contracted and single) between East Asia, Northern Europe, the Mediterranean Sea, and the East Coast of the United States. “High Season Surcharge” of $300 and $1,000 consistent with TEU.
According to the report, the Mediterranean Shipping Company (MSC), a global container shipping company, announced that it would impose a “contingency adjustment fee” of $500 per TEU on shipments from Europe to Asia and the Middle East.
Spot rates have continued to rise. The rate for shipping from Asia to Europe has risen to more than $3,000 per 40-foot container, three times more than the lowest rate in 2023 (around $1,000).
The World Bank said this could simply mean that Asian exporters are again competing for shipping slots in anticipation of significant disruptions in the origin chain.
Fortunately, he added that January and February are quiet seasons for freight, so existing capacity may be enough to serve longer routes in the coming weeks.
But naval attacks that would continue into March could have a significant impact on global industry and global value chains.
Gold rose as the dollar retreated and Treasury yields fell, even as the costs of other metals remained broadly combined.
The safe-haven precious metal was trading 0.1% higher at $2,073.0 a troy ounce, and is on track to consolidate its weekly gains after the Fed signaled rate cuts won’t be arriving any time soon, prompting slides in yields, analysts said, AFP reported.
That said, “in our view, gold is too nervous,” RBC analysts noted.
Battered by both positive and negative macroeconomic pressures, it’s no surprise that gold can’t attract steady flows of investors, given its expectation-based prices, analysts said.
Three-month copper fell 0. 3% to $8,615. 5 a tonne, while aluminum rose 0. 6% to $2,285. 0 a tonne.
The U. N. food agency’s global value index fell in January to its lowest point in just three years, due to falling grain and meat prices.
The Food and Agriculture Organization (FAO) stock index, which tracks the world’s most traded food products, averaged 118. 0 points in January, up from 119. 1 last month, the company said on Friday.
The January reading was the lowest since February 2021.
“Global wheat export prices declined in January driven by strong competition among exporters and the arrival of recently harvested supplies in the southern hemisphere countries,” the FAO said in its monthly update.
FAO also said maize prices fell sharply, reflecting an advance in development conditions and the start of harvest in Argentina and better materials in the United States.
The Meat Value Index fell for a seventh straight month as the abundance of materials from primary exporting countries pushed down the foreign value of poultry, beef and pork, FAO said.
In a separate report, FAO said global cereal production in 2023 is on track to reach a record 2. 836 billion tonnes, up 1. 2 percent from 2022. World coarse grains production was set at a record 1,523 million tonnes, following an upward adjustment of 12 million tonnes. tons this month.
“Most of the revision reflects new official knowledge from Canada, (mainland) China, Turkey and the United States, where a combination of higher yields and higher-than-expected harvested acreage led to higher maize production estimates,” he added. .
Turkey’s central bank governor Hafize Gaye Erkan resigned on Friday, raising a desire to protect her family amid a “reputation assassination,” and was temporarily replaced by a lawmaker who is expected to respect her strict political stance.
President Tayyip Erdogan, who hired Erkan eight months ago to abandon years of low interest rates that fueled inflation and adopt a more orthodox policy, appointed Deputy Governor Fatih Karahan to take the reins, the Official Journal reported on Saturday, two hours after the wonderful resignation.
Karahan, a former Federal Reserve Bank of New York economist, was appointed deputy in July and is seen as a capable successor who played a big role in engineering the monetary tightening.
Erkan, a former head of a U. S. bank, began raising rates as soon as she was appointed in June, launching a 180-degree turn after years of low rates under Erdogan that had boosted inflation and scared away foreign investors.
Since then, the central bank has raised its key interest rate from 8. 5% to 45%. Last week, after a 250 basis point increase, it said it had adjusted inflation enough to achieve disinflation, indicating a halt.
Erkan said that “our economic program has to bear fruit,” citing the accumulation of foreign exchange reserves and expectations that inflation would begin to calm by the middle of the year “as proof of this success. “
“Despite all these developments, as the public knows, a major reputational crusade has recently been organized against me,” he added on social media platform X.
“To prevent my family and my innocent son, who is not even a year and a half old, from being further affected by this situation, I have asked our president to pardon me from office. “
Last month, the opposition newspaper Sozcu published an article about a central bank worker who claimed to have been wrongfully dismissed through Erkan’s father.
In her response, Erkan called an “unfounded” article directed at her, her family and the bank “unacceptable” and vowed to exercise her legal rights against those responsible.
The International Monetary Fund (IMF) has revised its expectations for economic expansion in Saudi Arabia, indicating a outlook for the Kingdom’s economy.
The IMF now forecasts an expansion rate of 5. 5% in 2025, up from its previous estimate of 4. 5% in October 2023.
These revisions were made based on the data published in the IMF’s report “Updates on Global Economic Prospects” in January 2024, which highlighted the optimistic outlook for the Saudi economy’s performance and strength despite the risks and challenges present in the global economic landscape.
This outlook confirms the expansion and prosperity of the Saudi economy, driven by strong leadership both regionally and internationally.
The report also expects the economy to grow by 3. 1% in 2024 and 3. 2% in 2025.