27 September 2023
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Dubai government debt down to 25 percent of GDP

By Khatija Haque

Dubai’s Media Office reported that the government had reduced its stock of debt to 25% of GDP by repaying AED 28.5bn (USD 7.8bn) of debt over the last 18 months. The debt repaid was largely owed to Abu Dhabi and the UAE central bank (AED 20bn). The government listed stakes in several GREs last year, raising over USD 8bn in IPO proceeds, and tax revenues have also likely benefitted from strong economic growth in the emirate over the last two years. IMF data suggest that debt levels for the sovereign are now lower than in 2018.    

Inflation in Saudi Arabia slowed to 2.0% y/y in August from 2.3% in July, with the CPI unchanged m/m. The only components to show price increases m/m in August were housing (+0.7% m/m; 9.0% y/y) and restaurants and hotels (+0.6% m/m; 2.7% y/y). Inflation in the kingdom has averaged just 2.7% so far in 2023, despite robust non-oil sector growth.

US consumer confidence declined to a four-month low of 103 in September, below market forecasts, according to the Conference Board. While the current conditions index improved slightly, the expectations component fell almost 10 points from last month. Higher petrol prices typically weigh on consumer confidence and that was cited in this month’s survey also, along with broader inflation and high interest rates, even as unemployment remains low.  

US new home sales declined by a larger than expected -8.7% m/m to 675k (annualized) in August, more than reversing the gain in July. The sales figure was a five-month low, and the decline was broad-based across most regions. High prices and mortgage rates have weighed on demand.

Today’s Economic Data and Events

  • 16:30 US durable goods orders (Aug) forecast -0.5% m/m

Fixed Income

  • US Treasuries had a choppy day of trading but ultimately closed unchanged. The 2yr UST yield settled at 5.1207% while the 10yr closed at 4.5356%. European government bonds also showed little change with the 10yr bund yield up 1bps at 2.802% and gilt yields unchanged at 4.319%.
  • Emerging market bonds sold off overnight with a broad emerging market USD index down 0.2%. In local currency markets Turkey 10yr yield added 70bps to 25.21% while South African 10yr yields added 16bps to 12.389%.   


  • The US dollar extended gains over peers last night with broad based selling in all FX markets. EURUSD fell 0.2% to 1.0527 while GBPUSD sank 0.4% to 1.2158. USDJPY broke above the 149 level, rising 0.1% to 149.07.
  • Commodity currencies weren’t spared the selling with USDCAD up 0.5% at 1.3517 while AUDUSD fell 0.4% to 0.6397 and NZDUSD dropped the same amount to 0.5954.


  • There were broad-based losses on global equity markets yesterday, as investors continue to digest the likelihood of interest rates needing to stay higher for longer. In the US, the Federal Trade Commission and 17 states sued Amazon for monopolistic practices, which weighed on the broader tech sector as well. The Dow Jones, the S&P 500, and the NASDAQ declined 1.14%, 1.47%, and 1.57%, respectively.
  • Weakness wasn’t limited to US markets, with falls also being seen in major European equity markets on Tuesday. The Eurostoxx 50 index lost 0.92%, the DAX fell 0.97% and the CAC 40 declined 0.7%. The FTSE 100 was the relative outlier, gaining 0.02%.  
  • Locally, the ADX fell 0.22% and the DFM declined 0.67%.  


  • Oil prices recovered some ground yesterday with Brent futures up 0.7% at USD 93.96/b and WTI adding 0.8% at USD 90.39/b. API data reported a 1.6m bbl build in US crude inventories last week though both gasoline and distillate stockpiles were lower.  

Written By

Khatija Haque Head of Research & Chief Economist

Edward Bell Head of Market Economics

Jeanne Walters Senior Economist

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