Economy

UAE inflation rate reached 11.1 per cent in 2007

Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, has announced that the country's inflation rate reached 11.1 per cent in 2007, influenced by increases in the prices of goods and services. This figure was derived by measuring the percentage change in prices of a representative basket of goods and services consumed by the average UAE household. Research conducted by the MoE's Consumer Price Index (CPI) Division revealed that the 2007 rate resulted from varying increases in the consumer prices of all expenditure groups. The "House Rent and Related House Items" category recorded the highest gain among all groups at 17.5 per cent, followed by "Other Goods and Services" at 16.8 per cent. Increases in the average prices of other expenditure items ranged from 3 to 8 per cent.

Kuwait: Oil revenues lift budget surplus last fiscal year 2007/08 to an all-time high

In its latest economic brief on public finance, National Bank of Kuwait reports that the Ministry of Finance has recently released the closing accounts of the government budget for the 2007/08 fiscal year (FY07/08). It showed the fiscal surplus reaching a record high KD 9.3 billion, before the allocation of 10% of revenues to the Reserve Fund for Future Generations (RFFG). The surplus was up 23% from last fiscal year, and equivalent to 29% of 2007 GDP. Oil revenues were the major contributor to the growing surplus. A smaller contribution came from the fall in government spending due to the absence of extraordinary transfers to the Public Institution for Social Security (PIFSS). Non-oil revenues recorded remarkable growth as well, besting their strong performance of last year.The reported surplus, in spite of its large size, underestimates the net additions to state reserves as the budget excludes government investment income. The two major sources of investment income are the distributed profits of state-owned Kuwait Petroleum Corporation and the returns on government investments abroad. While revenue from crude oil production is reflected in the budget, all other income from refining and downstream activities accrue to KPC, whose profit distributions go the General Reserve Fund. Such distribution amounted to KD 1.5 billion in 2006/07 (latest figure available). Meanwhile, investment income from foreign asset holdings reached KD 2.4 billion in 2007 according to balance of payments statistics. Together these two income sources represent at least 20% of budget revenues.

Egypt posts surplus of US$ 4.9 billion in balance of payments

The Central Bank of Egypt (CBE) announced that the balance of payments realized a surplus of US$ 4.9 billion during the period (July 2007 - March 2008) versus US$ 3.1 billion surplus during the same period of last year. According to al Ahram newspaper, this rise was mainly attributed to the net inflow in the capital and financial account, which amounted to US$ 3.6 billion. The surplus on the current account resulted from the surplus realized on both the services balance and net unrequited transfers, which outpaced the increase in the trade deficit. Merchandise exports increased by US$ 4.9 billion or 31.1 percent, to reach US$ 20.8 billion. This was ascribed to an increase of 35.4 percent in oil exports, and 27.4 percent in non-oil exports (mainly raw materials and finished goods). Meanwhile, merchandise imports scaled up by US$ 11.3 billion or 43.1 percent, to US$ 37.6 billion. The increase was due to the tangible increase in oil imports, and the 31.5 percent rise in non-oil imports, (due to the increase in all merchandise groups, particularly intermediate goods which accounted for 32.2 percent of the total increase in imports).