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Daniel Richards - MENA Economist
Published Date: 17 March 2023
The ECB hiked its benchmark interest rate by 50bps yesterday, taking it to 3.0%. While there had been questions around whether the bank would follow through with its pledge for a half a percent move in the wake of recent unease in the banking sector, the statement made clear that its priority remains squarely on tackling inflation. There was more uncertainty over future moves given recent events, but ECB president Christine Largade stressed that the banking sector was in a more secure position than it was in 2008. Inflation projections were lowered from 6.3% to 5.3%, but this remains well above the bank’s target rate, and the outlook for core inflation was ramped up. The ECB said that the “elevated level of uncertainty” meant that they would take a “data-dependent” approach to setting policy, rather than making relying on forward guidance to help shape policy and markets’ assumptions of policy directions. The previous pledge to keep ‘raising interest rates significantly at a steady pace’ was abandoned, which should provide some flexibility on the next steps taken by the bank if inflation does start to slow down and strain in financial markets persists. The bank also noted that the overall eurozone banking system is ‘resilient’ as it monitors the financial stress stemming from the collapse of Silicon Valley Bank and strains on Credit Suisse but also said that it stood by to provide ‘liquidity support’ as needed.
US initial jobless claims came in at 192,000 in the week to March 11, coming in under consensus projections of 205,000 and marking a slowdon from the 212,000 recorded the previous week. This was the biggest fall in the reading since July, illustrating ongoing strength in the US labour market in the week of two consecutive months of upside surprises on the NFP report.
Tax revenue in the UAE was up 29% y/y in Q4 of last year, rising from AED 58bn to AED 75bn. Total revenue was up 7% y/y to AED 143.1bn. Meanwhile, total expenditure was at AED 120.3bn, down from AED 136.2bn in Q4 2022.
DP World released its 2022 financial results yesterday, announcing net profits of USD 5bn as revenue rose 58% to USD 17.1bn. The revenues were driven by acquisitions of new port facilities, and by robust throughput growth at existing facilities.
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