Saudi Aramco has released its third quarter results, showing a 23% fall in net income to SAR 122.2bn (USD 32.6bn), down from SAR 159.1bn in Q3 2022. The fall came on the back of both lower production and prices, with Saudi Arabian output down 17.2% y/y and Brent futures prices 12.3% lower y/y. Revenue for Q3 dipped to SAR 424.1bn, from SAR 543.7bn a year earlier. The same dynamics led Saudi Arabia’s budget balance to dip further into deficit in the third quarter. In a positive for the state coffers, however, Aramco has announced that it will be maintaining its dividend payment at SAR 110.3bn (USD 29.4bn), the same as in Q2.
German industrial production contracted by 1.4% m/m in September, larger than the predicted 0.1% contraction and in contrast to the upside surprise in September factory orders in data released the previous day. On an annual basis, production was down 3.7% with the European industrial powerhouse struggling to adjust with weaker export demand from China and higher input prices following the turn away from Russian gas. This marked the fourth month in a row that industrial output has fallen, with autos production and pharmaceuticals both heading lower. In further weak data out of Germany, insolvencies have reportedly risen 2% m/m and 44% y/y in October and the expectation is that Germany will enter a technical recession in Q4 with a second consecutive quarterly contraction.
Egypt has reported 1.3mn visitors for the month of October, y/y growth of 8%, in signs that the conflict in neighbouring Gaza has yet to negatively impact the sector to a significant degree. Tourism minister Ahmed Essa has said that the goal of 15mn visitors this year remains in play, with ambitions to double that to 30mn visitors annually by 2028. Revenue from tourism hit USD 13.6bn in the fiscal year ended in June, exceeding pre-Covid levels and contributing to a meaningful narrowing of the current account deficit to 1.2% of GDP.
The IMF has upgraded its 2023 growth forecast for China to 5.4%, from 4.6% previously according to its Article IV mission statement. The upgrade is on the back of a stronger than anticipated third quarter and some government stimulus measures. However, growth is forecast to slow to 4.6% in 2024.
Today’s key economic data and events
Fixed Income
FX
Equities
Commodities