KARACHI: Pakistan’s central bank cut its key policy rate by 250 basis points to 15 percent on Monday, it said in a statement, for a fourth straight reduction since June, as the country keeps up efforts to revive a sluggish economy with inflation easing.
Most respondents in a Reuters poll last week expected a cut of 200 bps after inflation moved down sharply from a multi-decade high of nearly 40 percent in May 2023, saying reductions were needed to bolster growth.
Average consumer price index inflation in the South Asian country is 8.7 percent in the current financial year, which started in July, the statistics bureau says. The International Monetary Fund (IMF) expects inflation to average 9.5 percent for the year ending June.
Monday’s move follows cuts of 150 bps in June, 100 bps in July, and 200 in September that have taken the rate from an all-time high of 22 percent, set in June 2023 and left unchanged for a year. It takes the total cuts to 700 bps in under five months.
October inflation came in at 7.2 percent, slightly above the government’s expectation of 6 percent to 7 percent. The finance ministry expects inflation to slow further to 5.5 percent to 6.5 percent in November.
However, inflation could pick up again in 2025, driven by electricity and gas price increases after a new $7-billion IMF bailout, and the potential impact of taxes on the retail, wholesale and the farm sector announced in the June budget to take effect in January 2025, some analysts say.
Pakistan central bank cuts key rate by 250 bps to 15%
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Pakistan central bank cuts key rate by 250 bps to 15%
- Monday’s move follows cuts of 150 bps in June, 100 in July and 200 in September
- It takes the total policy rate cuts in the country to 700 bps in under five months
IEA predicts global oil market will remain well-supplied in 2025
RIYADH: The global oil market is expected to be adequately supplied in 2025, even as OPEC+ extends its voluntary production cuts by an additional three months, according to the International Energy Agency.
In its latest report, the IEA raised its global oil demand growth forecast for 2025 to 1.1 million barrels per day, up from its previous estimate of 990,000 bpd. This upward revision is driven by rising oil demand in Asian markets.
The report comes just a day after OPEC revised its own global oil demand growth projection for 2025, cutting it to 1.4 million bpd. According to the oil producers’ group, total global oil demand is expected to reach 105.3 million bpd in 2025, an increase from 103.8 million bpd in 2024.
The IEA noted that OPEC+ decision to extend its voluntary production cuts for another three months and push back the ramp-up period by nine months, now extending to September 2026, has significantly reduced the potential supply surplus that was anticipated for next year.
However, the IEA cautioned that persistent overproduction from some OPEC+ members, strong supply growth from non-OPEC+ countries, and relatively modest global oil demand growth would still result in a comfortably supplied market in 2025.
Global oil consumption is projected to reach 103.9 million bpd in 2025, closely aligned with OPEC+ forecast.
The IEA also highlighted that oil demand growth next year would be largely driven by petrochemical feedstocks, while demand for transport fuels remains constrained by behavioral changes and advancements in technology.
The report also indicated that crude oil production from OPEC could increase next year if countries such as Libya, South Sudan, and Sudan can maintain their production levels, along with the expansion of Kazakhstan’s Tengiz field.
On the global supply side, non-OPEC+ countries are expected to contribute the majority of production growth, with the US, Brazil, Canada, Guyana, and Argentina collectively adding over 1.1 million bpd.
Additionally, the IEA forecasted that Saudi Arabia’s oil supply would receive a boost in 2025 from the start-up of Saudi Aramco’s Jafurah gas project, which will increase the Kingdom’s natural gas liquid supply.
In June, Aramco finalized $25 billion worth of agreements for the second phase of its Jafurah gas field development and the third phase of its master gas system expansion.
These infrastructure upgrades are expected to increase the network’s capacity by 3.15 billion standard cubic feet per day.
Qatar records budget surplus of $27.43m in Q3, finance ministry says
CAIRO: Qatar recorded a budget surplus of 100 million Qatari riyals ($27.43 million) in the third quarter of 2024, the finance ministry said on Wednesday.
Qatar's total revenues registered around 51.3 billion riyals in the same quarter.
Egypt to bolster IPO program with 10 offerings in 2025: PM Madbouly
RIYADH: Egypt is set to accelerate its initial public offering program, with plans to propose stakes in at least 10 state-owned companies next year, according to Prime Minister Mostafa Madbouly.
In a Facebook post, the Egyptian prime minister’s office said that some of the companies which will float its shares include Wataniya Co., Safi Co., Silo Food Co, and 580-megawatt wind farm Gabal El Zeit.
The PM office added that shares of state-owned Alexandria Bank and Banque du Caire will also be included in the upcoming offerings.
The announcement made by Madbouly indicates new efforts from the government to divest some of its assets to strengthen the country’s private sector and fiscal capabilities.
Earlier this month, Egypt’s United Bank completed the public and private offering of 330 million shares, representing 30 percent of its issued capital.
The United Bank offering raised a total of 4.57 billion Egyptian pounds ($90 million).
Other companies that will be listed in 2025 include CID Pharma, Misr Pharma, and Alamal Alsharif Plastics.
Regarding tourism growth, Madbouly said that Egypt had a succesful year despite regional crises and geopolitical tensions.
“This year, we will exceed 15 million tourists despite all the challenges that have affected the arrival of tourists in the region, but Egypt is on a good track in this area, and the numbers will be better next year,” said the prime minister.
He added: “We are working in the tourism sector strongly, and we are moving ahead to increase hotel rooms, and improve the tourist experience in Egypt.”
In the Facebook post, the PM’s office also highlighted the progress of the electricity connection project between Saudi Arabia and Egypt.
He added that the work at the Badr converter station is 65 percent completed, with the first phase of the project’s wiring process expected to be completed before the next summer season.
The prime minister further said that Egypt’s inflation rate fell to 25.5 percent in November, a significant decrease in this index over the past two years.
In September 2023, the inflation rate in Egypt had increased to an all-time high of 38 percent.
Madbouly added that the country’s reserve cash index has also improved, reaching $47 billion in November.
Earlier this month, a report released by Fitch Ratings echoed the economic revival of Egypt. It highlighted that the general business and operating conditions for financial institutions in the country are expected to improve next year.
The US-based agency added that falling inflation, improved investor confidence, and healthy foreign currency liquidity conditions are some of the major factors that could strengthen the banking sector in Egypt in 2025.
Saudi Arabia’s money supply reaches $783bn: SAMA
RIYADH: Saudi banks’ money supply increased by 9.21 percent year on year in October, reaching SR2.94 trillion ($782.96 billion), according to the Kingdom’s central bank, also known as SAMA.
A significant portion of this growth was driven by term deposits, which surged by 15.34 percent to SR971.1 billion during the period.
Demand deposits, the largest component of the money supply, accounted for 48.55 percent, or SR1.42 trillion, but recorded a comparatively modest growth rate of 8.63 percent.
In contrast, other quasi-money deposits, which represent 10.64 percent of the money supply, declined by 4.27 percent, totaling SR312.51 billion.
Time and savings deposits accounted for 33.07 percent of Saudi Arabia’s money supply in October, marking their highest level in nearly 15 years.
This upward trend has gained momentum in recent years, largely due to SAMA’s alignment of its interest rate policy with the US Federal Reserve.
The Fed’s tightening cycle, which pushed interest rates to a peak of 6 percent in July 2022, incentivized depositors to shift toward interest-earning accounts to maximize returns during this period of elevated rates.
This mirrored policy, aimed at combating inflation, made interest-generating accounts increasingly attractive to Saudi depositors seeking higher returns.
A significant factor contributing to the growth of term deposits has been the influence of institutional deposits, particularly from government-related entities.
According to Fitch Ratings, these entities accounted for a substantial 70 percent of the total deposit inflows in 2023. This strategic channeling of funds into time deposits not only provided banks with much-needed liquidity but also highlighted the role of bulk deposit agreements with favorable terms as a growth driver for this category.
Despite the Federal Reserve shifting to a monetary easing stance — reducing rates by 50 basis points in September and an additional 25 basis points in November — term deposits in Saudi banks continue to gain traction.
Government-linked entities appear to maintain their preference for term deposits due to their stability and return potential.
Additionally, the predictability of these deposits aligns well with the broader macroeconomic environment, where banks rely on such inflows to manage liquidity pressures effectively and maintain operational stability.
Another contributing factor could be the interest rate lag, where the transmission of lower benchmark rates into domestic banking systems takes time. This lag keeps deposit rates relatively competitive, allowing time deposits to retain their appeal even as monetary policy shifts toward easing.
Time and savings accounts, while crucial for liquidity management, are generally considered a costlier funding source for banks due to the interest obligations they carry.
Saudi banks, however, have managed to maintain robust profitability metrics, with most reporting strong financial results in 2023 and through 2024.
Fitch Ratings projects this strength to persist throughout 2024, supported by favorable macroeconomic conditions and the Kingdom’s high operating environment score of bbb+ — the highest among Gulf Cooperation Council banking sectors and emerging markets globally.
Haleon Pakistan to start manufacturing multivitamin brand Centrum
- Haleon plans to expand its pain management offerings next year by adding the Panadol range for menstrual pain and migraines
- In first stage of launch, expected in first quarter of 2025, product will be imported, and in the second stage it will be made locally
KARACHI: Haleon Pakistan plans to start manufacturing multivitamin brand Centrum in the country for domestic sales and export, its CEO said, as it seeks to boost sales in the country amid lower inflation.
The Pakistan unit of British consumer health care firm Haleon plans to expand its pain management offerings next year by adding the Panadol range for menstrual pain and migraines, CEO Farhan Muhammad Haroon told Reuters in an interview.
“Pakistan has a 24 billion rupee ($86.30 million) Vitamin Mineral Supplement market. This does not include the grey market. We already make up 7.5 billion rupees ($26.97 million) of the market through our (vitamin) products CAC-1000 Plus and Qalsium-D,” said Haroon.
“With the launch of Centrum, we plan to capture 7 to 8 percent of the remaining market immediately, which is a sizeable portion of the category.”
Haroon said the company plans to sell Centrum in smaller bottles so customers do not have to worry about high upfront costs, as purchasing power has diminished in the country after inflation hit a multidecade high of around 40 percent last year. In November, Pakistan’s consumer price index inflation slowed to 4.9 percent.
Haroon said in the first stage of the Centrum launch, expected in the first quarter of 2025, the product will be imported, and in the second stage it will be made locally with market specific variants to suit needs of Pakistanis and other export markets.
“We already export our calcium and vitamin D supplement CAC-1000 Plus and topical pain relief product Voltral Emulgel to Vietnam and Philippines, we will be ready to export to 19 countries in the next 1-1.5 years,” he said.
Haleon Pakistan sees at least 10 percent of its sales coming from exports in the next two years, up from 5 percent-6 percent during its peak in 2022, Haroon said, adding that it had invested $10 million last year to enhance local production capabilities.
