Dubai’s government approved a 2023 budget of AED67.5bn, a 13% increase on the 2022 budget. With revenue expected to rise by 20% next year, the government forecasts a surplus of AED 1.5bn (0.3% of GDP) in 2023 from a (budgeted) deficit of -AED 2.5bn in 2022. This is the first planned surplus since 2019, as Dubai’s economy is expected to benefit from a continued rebound in tourism and travel next year. On the spending side, over 40% of the budget is allocated to infrastructure development and maintenance, with 34% set aside for social development and services and 20% for security and justice.
Egypt’s headline CPI inflation rate rose to 18.7% y/y in November, up from 16.2% y/y the previous month. The November print was the first following the late-October depreciation in the EGP, as a new IMF deal was concluded, and so was expected to head higher. The higher rate of inflation was also consistent with survey responses seen in the November PMI, released earlier this week. Prices were up 2.3% m/m, a slowdown from 2.6% in October. Food and beverage prices, the largest component of the basket, were up 29.9% y/y but while core inflation has not yet been released that was likely also higher than the 19.0% recorded in October.
US initial jobless claims held broadly steady (and in line with expectations) in the week ending December 3, coming in at 230K from 226K the week prior. Continuing claims rose again, ticking up slightly in the week ending November 26 to 1671K from 1609K the week before. Although this is the highest reading since February 2022 and indicates that workers are taking slightly longer to find new employment after being laid-off, the reading remains below the pre-pandemic average.
Consistent with expectations, Chinese CPI came in at 1.6% y/y down from October’s reading of 2.1% y/y. Notably food inflation fell from 7% y/y in November to 3.7% in October. Core inflation remained unchanged at 0.6% y/y in November, highlighting the underlying weakness in Chinese price growth. Producer prices remained in deflation for a second month, coming in at -1.3% y/y in November, after having fallen to the same extend in October. The PPI print was slightly higher than consensus expectations of a 1.5% fall in inflation on the month. Weak inflation to date is a reflection the country’s strict Covid-19 restrictions. Although restrictions are now being relaxed any widespread Covid outbreaks in the country may itself cause further economic strain.
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