Inflation set to spike in UAE, other Gulf countries due to Russia-Ukraine war

News Network
May 30, 2022

Economists have warned that Inflation in the wider Middle East including the Gulf Cooperation Council countries will spike this year due to an increase in food and commodity prices after the Russia-Ukraine war.

“The UAE economy has had a strong start to 2022, with crude oil production up 12 per cent year-on-year in the first quarter of this year. Survey data points to a solid expansion in non-oil sectors as well. We expect inflation to average 4.3 per cent this year from 2.3 per cent previously, significantly higher than last year’s 0.2 per cent average consumer price index,” said Emirates NBD Research in a recent quarterly report on the region.

It is projected that the inflation will ease to 2.5 per cent for the UAE next year.

While inflation in most of the other Gulf countries will also witness a surge this year, with average inflation reaching 3.0 per cent, 3.5 per cent, 2.5 per cent, 3.5 per cent and 3.0 per cent in Saudi Arabia, Qatar, Oman, Kuwait and Bahrain, respectively.

The increase in inflation is attributed to the impact of the Ukraine-Russia war on the global food and other commodity prices as well as high crude oil prices.

James Swanston, economist for the Mena region at Capital Economics, said non-Gulf economies are more vulnerable to the fallout from the Ukraine war.

“Higher commodity prices will increase subsidy costs in North Africa, which is likely to prompt governments to cut expenditure elsewhere. At the same time, inflation will rise further and erode households’ real incomes,” he said.

He said higher commodity prices will also cause external positions to deteriorate further.

Recently, Egypt responded to this by devaluing the pound in March, and Swanston believes Cairo will need to let the currency fall further. “This will push inflation up, even more, taking it well above the central bank’s target range and prompting another 350bp of interest rate hikes (to 12.75 per cent) by year-end – this is far more tightening than most currently expect.”

James Swanston projected that inflation will increase in Saudi Arabia in the coming months due to the impact of rising global food prices.

“However, we do not expect the headline rate to rise to levels seen elsewhere in the emerging world, particularly as the government has kept a cap on local fuel prices since July last year. Inflation should peak around 2.5 per cent and then fall back to around 1.0-1.5 per cent year-on-year where it will remain throughout 2023-24. If the government does loosen fiscal policy by cutting value-added tax (VAT), this would knock inflation further down,” he added.

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News Network
October 8,2024

Mangaluru: The by-election to the legislative council from the Dakshina Kannada and Udupi local authorities' constituency will be a contest among four candidates. An independent candidate, Muhammed Riyaz, has withdrawn his nomination on Monday, the last day for withdrawal.

Deputy commissioner Mullai Muhilan MP stated that candidates Kishore BR (BJP), Raju Poojary (Congress), Anwar Sadat S (SDPI), and Dinakar Ullal (independent) will be in the fray. 

Polling will be held at 392 booths in Dakshina Kannada and Udupi districts between 8am and 4pm on Oct 21.

A total of 6,032 voters from Dakshina Kannada and Udupi are eligible to vote. While there will be 234 polling booths in Dakshina Kannada, Udupi will have 158 stations. Gram panchayat members, corporators of the Mangaluru City Corporation, members of city municipal councils, town municipal councils, town panchayats, MLAs, MLCs, and Lok Sabha members are eligible to vote.

Election observer of the Election Commission of India (ECI), Pankaj Kumar Pandey, reviewed the poll preparations at the deputy commissioner's office on Monday. He issued directions to officials regarding arrangements to be made during the election and counting of votes.

The deputy commissioner stated that out of 6,032 voters, 3,127 are women and 2,905 are men. He said the counting of votes will be held at St Aloysius PU College in the city on Oct 24.

Udupi deputy commissioner Vidya Kumari K, city police commissioner Anupam Agrawal, Dakshina Kannada ZP CEO Anandh K, Dakshina Kannada SP Yathish N, Udupi SP Arun K, and additional deputy commissioners Santhosh Kumar G and Mamatha Devi were present.

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News Network
October 2,2024

The Ministry of External Affairs (MEA) has issued a travel advisory for Indian citizens in light of the escalating tensions in the Middle East, specifically advising against non-essential travel to Iran.

"We are closely monitoring the recent escalation in the security situation in the region. Indian nationals are advised to avoid all non-essential travel to Iran. Those currently residing in Iran are requested to remain vigilant and stay in contact with the Indian Embassy in Tehran," the Ministry of External Affairs said.

For those already residing in the country, the MEA advised vigilance and recommended staying in close contact with the Indian Embassy in Tehran for any assistance. The situation continues to be under observation as tensions in the region unfold.

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News Network
October 4,2024

taliban.jpg

Moscow, Oct 4: Russia's Foreign Ministry said on Friday that a decision to remove the Taliban from a list of terrorist organisations had been "taken at the highest level", the state TASS news agency reported.

The decision needs to be followed up with various legal procedures in order to make it a reality, President Vladimir Putin's special representative on Afghanistan, Zamir Kabulov, was quoted as saying.

Putin said in July that Russia considered Afghanistan's Taliban movement an ally in the fight against terrorism.

Russia has been slowly building ties with the Taliban since it seized power in Afghanistan in August 2021 as U.S.-led forces withdrew after 20 years of war but the movement is still officially outlawed in Russia.

No country has formally recognised the Taliban as the country's legitimate leadership, although China and the UAE have accepted its ambassadors.

Russia added the Taliban to its list of terrorist organisations in 2003. Removing it would be an important step by Moscow towards normalising relations with Afghanistan.

The Taliban's acting foreign minister Amir Khan Muttaqi said in a speech in Moscow that recent decisions by Kazakhstan and Kyrgyzstan to remove the former insurgents from a list of banned groups was a welcome step.

"We also appreciate the positive remarks by the high-ranking officials of the Russian Federation in this regard and hope to see more effective steps soon," he said.

In separate comments on Friday, Russian Foreign Minister Sergei Lavrov said Moscow was convinced of the need to maintain "pragmatic dialogue" with the current Afghan government.

"It is obvious that it is impossible to solve problems or even discuss an Afghan settlement without Kabul," Lavrov said.

"Moscow will continue its course on developing political, trade and economic ties with Kabul," he added, speaking at a meeting in Moscow with Muttaqi and representatives of neighbouring countries.

While he did not mention the Taliban by name, he praised the current Afghan leadership for its efforts to curb drug production and fight Islamic State, which is outlawed in Russia.

Muttaqi said that countries in the region should cooperate against the Islamic State, which he said had established training centres outside Afghanistan.

Lavrov said the United States should return confiscated assets to Afghanistan and the West should acknowledge responsibility for the post-conflict reconstruction of the country.

Lavrov also called for an increase in humanitarian aid to Afghanistan, and said Russia would keep sending it food and essential goods.

Russia has a troubled history in Afghanistan, where the Soviet army invaded in 1979 to support a pro-Moscow government but withdrew 10 years later after sustaining heavy casualties at the hands of mujahideen fighters.

Russia and its post-Soviet neighbours have suffered recurrent attacks from Islamist militant groups linked to Afghanistan - most recently in March, when 145 people were killed in an attack claimed by Islamic State at a concert hall near Moscow.

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