Weekly Insights 30 Aug 2024: Deals enable trade expansions across the GCC; also benefits the air cargo industry
1. UAE non-oil foreign trade hit a record-high AED 1.395trn in H1
- UAE’s non-oil goods trade increased to a record-high AED 1.395trn in H1 2024, up 11.2% yoy.
- This surge was supported by the 25% increase in non-oil goods exports: at AED 256.4bn, non-oil exports in H1 2024 were higher than what was recorded in the full year 2019! Meanwhile, re-exports and imports grew by 2.7% and 11.3% respectively (to AED 345.1bn and AED 800bn). Major re-export partners were Saudi, Iraq and India while leading re-exported goods were telephones and diamonds.
- Non-oil exports to the UAE’s top 10 trade partners surged by 28.7%: Iraq was the top destination for UAE exports, followed by India & Turkey. Non-oil exports to Iraq surged by 41% while that to Turkey and India grew by 15% and 10% respectively: partly the impact of CEPAs.
- Multiple CEPA discussions are in progress (e.g. with Philippines, New Zealand) & UAE expects non-oil trade to cross AED 3trn by end-2024.
2. Qatar trade surplus widened to QAR 20.1bn in Jul 2024
- Qatar’s July foreign trade was driven by upticks in both exports & imports, resulting in a wider trade surplus of QAR 20.1bn in Jul
- Exports grew by 3.9% yoy to QAR 30.2bn, thanks to the increase in exports of petroleum gases & other gaseous hydrocarbons exports (3.7% to QAR 17.6bn; or 61.3% of domestic exports). Re-exports grew by 31% to QAR 1.5bn in Jul.
- China was the largest export destinations in Jul, followed by South Korea and India; the top 5 destinations accounted for 57.4% of total exports.
- Imports increased by 6.8% yoy to QAR 10.077bn in Jul: China was the main import partner, and together the top 5 importing nations took a share of 47.9% of total imports.
- Qatar’s position as a leading LNG exporter is further cemented by its multi-year deals with many nations – the latest was a 15-year deal to supply Kuwait with 3mn tons per annum, with deliveries starting Jan 2025. Deals were previously signed with China, France, Germany & India among others.
3. Total deposits in Saudi Arabia declined month-on-month in Jul, with a larger drop in government deposits; credit growth was up 8.6% in Jan-Jul; SAMA net foreign assets grew in yoy terms for the 5th month in a row
4. GCC inflation has been easing in 2024. Food inflation has been higher than headline in most of the region; Services inflation has also been relatively high (e.g. education, finance); In Dubai & Saudi Arabia, housing costs have been a main driver of inflation
5. Strong demand during the summer sees growth in air passenger and cargo in Jul
- International passenger traffic growth remained robust (10.1% yoy in Jul). Two regions posted double-digit gains while Middle Eastern airlines grew their international revenue passenger-kilometers (RPKs) by 5.8% yoy.
- Traffic in the Middle East-Asia route continued to rise: in Jul the RPK was almost the same as in Jul 2019; this upward trend is likely to continue.
- Record cargo capacity posted in Jul. Cargo tonne-kms (CTKs) grew by 13.6% year-to-date as of Jul. It also grew by 13.4% yoy, with expansions across all regions; Middle East carriers were the only ones with monthly gains.
- International air cargo demand on the Middle East-Europe lane surged by 32.3% – the most across all other major trade lanes – and continuing the double-digit growth (which began in Sep 2023). Middle East-Asia route was also among the fastest growing (+15.9%).
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