MENA | Lebanese government; Saudi GDP; UAE subsidies
After over a year of political impasse, Lebanon has finally formed a government, led by a twice-former prime minister Najib Mikati. The breakthrough gives a glimmer of hope that talks with the IMF can resume, paving the way for a financial rescue package needed to arrest further decline in the economy.
What you will learn:
- Saudi GDP rose 1.8% y/y in Q2 according to latest data revisions. The non-oil sector expanded by 8.4% in Q2, down from an earlier estimate of 10.1%, as the economy continued to recover pandemic losses.
- Despite some likely softening in activity in Q3, we see 2.9% growth in the non-oil sector this year, taking total
GDP growth to 2.3%, before a pick-up to 5.2% in 2022.
- The UAE has earmarked $6.5bn for incentives and subsidies to boost the share of employment of Emirati nationals in the private sector to 10% by 2026.
Eurozone: ECB minutes indicate that July rate hike is a near-certainty
The minutes from the April ECB meeting confirm the hawkish tilt initiated a few months ago continues to gain momentum. With a majority of the council increasingly concerned about the inflation outlook, this makes an interest rate hike already in July almost certain. This should not come as a surprise, however, as recent developments render hawks' case arguably easier to make.Find Out More
For how long will Japan’s households support bonds and the yen?
Households' financial surpluses sharply increased in 2020 and remained high in 2021 due to the Covid pandemic. Most of the surplus continued to go to cash and deposits, but there was a notable increase in funds going to investment trusts (with a large portion invested in foreign equities) in 2021. Amid rising international yield differentials and a weakening yen, there is market chatter about whether this is the beginning of a structural shift from households' risk-averse investment style?Find Out More