Consumer confidence in the eurozone is falling from a 17-year high

European consumer confidence fell more-than-expected in February from a 17-year high in the previous month, preliminary data from the European Commission showed on Tuesday.

The agency said its consumer sentiment index fell to 0.1 from 1.4 in January.

Economists polled by Reuters had an average reading of 1.0.

In the broader EU, consumer confidence also fell to -0.3 points from 0.4 points.

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The Gular gas liquefaction plant arrives in Kuwait within days

According to informed oil sources, the arrival of the vessel «Gular», which carries a mobile plant to liquefy gas to Kuwait on February 24, according to the latest data and correspondence in this regard.

The sources pointed out that the arrival of «Gular» aims to treat imported gas (LNG) before pumping it into the main grid of electricity.

The sources pointed out that «Petroleum Corporation» seeks to resume the pumping of imported LNG (LNG) importer by the month if the arrival of the plant as expected.

The sources expected that the first shipments of liquefied natural gas to Kuwait before the end of the month, saying «in the event of arrival of vessels and the readiness of facilities will begin to resume pumping gas in the main network starting Monday, February 26, 2018».

The estimated capacity of the vessel is 147 cubic meters (5.2 million cubic feet) of liquefied natural gas, and the gas shipments will begin to arrive until the end of the import season in December.

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«S & P»: Gulf banking sector will see further improvement this year

S & P Global, the global credit rating agency, predicted that Gulf banks will be stable in their performance and financial conditions starting in the second half of this year, after two years of considerable pressure on the sector.

The Gulf banking sector is expected to witness further improvements in asset quality standards, the agency said in a report, noting that there is a likely rise in the cost of risk on a large scale due to factors other than the defaults of new loans.

The agency said that banks will see an increase in the cost of risk during the current year due to adoption of the IFRS 9, asserting that the general provisions accumulated by Gulf banks during the past years will help them to move smoothly to the new accounting standard.

The slowdown in economic activity over the past two years has led to a slight increase in non-performing loans, while analysts expect non-performing loans to deteriorate further in the first six months of this year and gradually stabilize later.

"Our forecast reduces any unforeseen risk of geopolitical risks, or any other shock in the commodities market. Overall, we do not expect the NPL to exceed 5 percent over the next two years," the agency said. 1.2 percent for rated Gulf banks, compared to 1 percent in 2016, there is expected to be a marginal increase in the cost of risk this year.

The report pointed out that the year 2017 showed a slight improvement in the profitability of Gulf banks rated, but analysts do not believe the continuity of this situation, some of the improvement is due to the increase in the volume of income-generating assets, in addition to the rise in interest margins slightly, indicating that banks put their excess liquidity in Government bonds that earn more than cash deposits with central banks.

The report also pointed out that improved local liquidity and an increase in the rate of interest of the federal reserve was reflected by local authorities (excluding Kuwait) to a slightly higher average margin in 2017.

According to the report, analysts believe that the banking sector is stable at the level of profitability at a level below the historical level prior to the global financial crisis, backed by high cost of risk and the introduction of VAT.

On the other hand, the agency pointed to the continued decline in growth of lending to the private sector, during the first nine months of last year average of 2.6 percent, compared with 5.7 percent in 2016.

The agency expects the situation to continue because of the decline in government spending (excluding Kuwait). Private sector lending is expected to grow to 3 to 4 percent in 2018/2019, supported by strategic initiatives such as Expo Dubai 2020 and Vision 2030 and the 2022 World Cup. Qatar, and the rise in government spending in Kuwait due to the vision of Kuwait 2035.

"Domestic demand in the Gulf countries has been affected by negative borrowing with subsidies and the introduction of Value Added Tax (VAT) in the UAE and Saudi Arabia," the report said, noting that these measures are expected to affect consumer disposable income. Commercial and retail.

While public finances have improved with abundant liquidity in banking systems, banks will find a liquidity challenge and average loan growth in the region is expected to range between 3 and 4 percent next year.

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«Central» Amend the list of fees for banking services

The Central Bank of Kuwait has approved amendments to the list of fees for banking services offered to individuals and companies, sources told Al-Rai.

The sources pointed out that the increase in commission for a service was approved, while a bank proposal was rejected to increase the second service fee. The Central Bank also allowed the introduction of new fees that banks had not previously worked on.

According to the sources, the bank's checkbook commission was increased by between 4 and 65 percent to become a 10-page checkbook (without modification). The 25-page checkbook issuance fee is 5 dinars, JD 3 in the past, and the issuance of the 50-page checkbook to JD7, up from JD5.

The central bank allowed the banks to collect a commission on the cash disbursement of checks starting at JD10,000 and above JD 2.5, deducted from the beneficiary. This fee was introduced and the banks did not apply it in the past.

The sources pointed out that in accordance with the instructions issued in this regard, customers will be excluded from the elderly (60 years and above), as well as persons with special needs from the payment of this fee, which applies only to the cash disbursement of checks, and checks deposited directly in the account There is no change and will remain as it is a free banking service provided without any fees being charged.

The sources said that the Central Bank refused to get banks to charge fees to pass checks through electronic clearing, indicating that the banks proposed to receive fees for these operations, on the basis that these fees compensate for the expenses spent on the requirements of the application of the electronic system, and the consequent expenditure Logistical, maintenance and service provided by the bank's employees, but the Central Bank rejected the proposal.

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Kuwait needs 18 months to apply VAT

The implementation of VAT in Kuwait, Qatar, Oman and the Kingdom of Bahrain requires more time, said Deputy Director of International Monetary Fund Abdulhak Sanhaji.

Sanhaji pointed out that the four Gulf countries are expected to be technically ready to implement this tax within 18 months.

"The IMF is working with the four countries that are expected to implement the tax as part of a broad GCC agreement," Sanhaji told The National. "The Gulf countries are not currently ready to apply VAT because they need the technical side, The political debate is still going on on this subject.

The Gulf states are putting tax regulations in place to help reduce fiscal deficits, which have increased since 2015 due to the sharp drop in oil prices since mid-2014 and the drop in the barrel from $ 115 to less than $ 30 in early 2016.

Saudi Arabia and the UAE led the tax reforms with their introduction of value added tax earlier this year, as well as indirect taxes on energy drinks, soft drinks and cigarettes last year, while Bahrain began to apply indirect taxes in December.

Sanhaji said that there is political resistance in some Gulf countries regarding the idea of ​​applying VAT, and that it is not technically prepared to implement this tax.

According to Reuters, the application of value added tax was suspended in Bahrain until the approval of the joint committee between the Council of Ministers and the Parliament on the new rules for the distribution of aid to low-income earners.

The International Monetary Fund (IMF) expects the application of value added to the region to generate new returns ranging from 1.5 to 3 percent of non-oil GDP.

According to Oxford Economics, this tax will contribute to raising inflation to 4 percent in Saudi Arabia and the UAE, but it will have a slight impact on GDP growth.

The Kingdom of Saudi Arabia has approved a series of allowances for employees of the government sector, military personnel, retirees and students, as well as beneficiaries of social services, for a period of one year from January to help mitigate the effects of VAT and increases in energy prices .

Sanhaji pointed out that the effects of applying the tax will be transitional. When the VAT is applied, we will naturally find that prices are going up but over time they will go down, indicating that the implementation of the tax will have a slight impact on GDP , And will not have a significant negative impact on growth.

On the other hand, Central Bank of Bahrain Governor Rashid Mohammed Al-Maraj said that his country's economic growth may accelerate due to the recovery of oil prices since mid-2017, but warned that the government should be cautious about the budget deficit. It is only a matter of time before Bahrain begins to work with value added tax to strengthen state revenues.

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The USD is settling against the Dinar at 0.299

The exchange rate of the US dollar against the Kuwaiti Dinar today at 0.299 dinars, while the euro fell to 0.369 dinars compared to yesterday's exchange rates.

The Bank of Kuwait (CBK) said in its daily bulletin that the exchange rate of the British pound rose to 0.419 dinars, while the Swiss franc fell to 0.319 dinars, and the yen remained at 0.002 dinars unchanged.

The euro has moved slightly weaker in recent trading as expectations for a decline in key sectors in the euro zone as markets are waiting for the release of data on the euro zone today.

Markets are also waiting for the Federal Reserve's decision to raise interest rates at the bank's meeting in March.

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The Gulf economy has grown to its lowest level ever

The International Monetary Fund (IMF) expects total growth in the Gulf Cooperation Council (GCC) to reach its all-time low of 0.5 percent this year, with oil production cut under the OPEC-led agreement, to rise again in 2018 to 2.2 percent.

The Gulf countries grew by 2.2 percent in 2016, according to IMF data. Cash also predicted a recovery in non-oil growth in the GCC countries to about 2.6 percent in 2017 and 2.4 percent in 2018, compared to 1.8 percent in 2016, as a result of the overall slowdown in fiscal discipline.

The IMF said in a report that the weakness of oil prices continued despite the extension of the decision to reduce production of OPEC, noting that the oil-exporting countries continue to «adapt to these low prices, which weakened growth, and contributed to a large deficit in public finances and external account».

He added that in the light of the decline in oil prices, the oil-exporting countries in the region have intensified their need to reduce their focus on the redistribution of oil revenues through spending on the public sector and supporting energy.

"To achieve this goal, these countries have developed ambitious strategies to diversify economic activity, but the prospects for medium-term growth are still below historical averages due to ongoing financial controls. These weak prospects for growth shed more light on the need to accelerate the implementation of structural reforms as well ».

"The six GCC countries are still committed to applying VAT, but at a different pace," said Jihad Azour, director of the Middle East's Middle East department. "I feel through my contacts with the authorities that they remain committed and continue to prepare for implementation." .

All countries in the Gulf Cooperation Council (GCC) are still committed to implementing the tax, including Qatar and Kuwait, and countries with larger financial reserves compared to the deficit may be able to adopt a slower pace of tax enforcement, he said. "The pace of implementation will vary ... Some will be implemented in 2018, Some may need more time. "

Azour said that because the two largest economies in the GCC were applying for VAT at the same time, trade flows in the region would not be disrupted if other countries imposed the tax at different times.

Azour said the 5 percent value added was one of the measures that would allow for the desired diversification for a long time. "The small percentage of the drawing will have a limited impact on inflation," Azour said, adding that it would allow between 1.5 and 2 percent Of GDP each year.

He advised the Gulf countries to accelerate the diversification of their economies, which are still dependent on oil to a large extent, considering it the right moment for it.

At the same time, he warned that the current crisis in the region could weaken growth, although he stressed that the economic impact of the crisis is still limited after about 5 months.

"The impact of the crisis on Qatar's economy is limited and its effects on the region are nil," he said. "So far, there are no signs that the crisis has affected growth in the GCC. "There are very limited effects on trade and almost no effect on oil prices."

Egypt

On the other hand, the IMF expects Egypt to attract more foreign direct investment, increase its exports as a result of floating exchange rates, lift foreign exchange restrictions, apply investment law and grant industrial enterprise licenses.

"Neum" will benefit the entire region

The IMF supported the Kingdom's ambitious plan to establish a $ 500 billion commercial and industrial zone across Jordan and Egypt, indicating that the project will benefit the entire region.

He said that Riyadh needed to balance the huge cost of the region and other economic projects and its efforts to reduce the large budget deficit caused by the drop in oil prices on the other side. He said the plan to create the region, known as the Neum, could stimulate trade and allow the Middle East to benefit from its position as a bridge between Asia and Africa. "It is a sign of greater regional cooperation," he said.

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