Island Full Of Dreams! 22 May 2026
Recent data from Bayut, the UAE’s leading proptech platform, suggests that demand is not disappearing so much as reordering itself. In Dubai, that resilience is becoming most visible across three parts of the market: premium sales corridors, established mid-market ownership communities and family-oriented villa rentals. In villa sales, stronger recovery is visible not only in the US$ 545 to US$ 1.36 million band, which reflects mainstream end user demand, but also in the US$ 5.45 million to US$ 13.60 million and US$ 13.60 million to US$ 27.25 million brackets, mainly focussed in Dubai Hills Estate, Palm Jumeirah and Emirates Hills.
In the apartment segment, demand recovery is visible in higher-value bands, particularly between US$ 5.45 million to US$ 13.60 bracket, in established, lifestyle-focused areas like Jumeirah Beach Residence, Dubai Marina and Downtown Dubai. Another segment which also showed remarkable growth was for apartments priced between US$ 13.60 million to US$ 27.25 million with specific traction across Jumeirah and Palm Jumeirah. Haider Ali Khan, CEO of Bayut and dubizzle and CEO, noted that ”what stands out is that demand is returning first in the segments where decision-making is typically more deliberate, whether that is family housing, established ownership communities or ultra-prime property. That points to a market that is becoming more resilient, more selective and ultimately more mature.”
When it comes to the rental market, Bayut reported that performance had also been particularly strong in villa leasing bands between US$ 27.25k and US$ 54.50k with additional momentum in the US$ 54.50k to US$ 136.24k range. Those locations that have set their map to family housing demand and to communities that have become central to Dubai’s suburban expansion story, including Arabian Ranches 3, DAMAC Lagoons, Tilal Al Ghaf, The Springs and The Meadows.
Despite the ME crisis starting twelve weeks ago, Dubai’s property market continues to demonstrate its resilience, with Property Market data showing that since 29 February, fifty-nine new projects, encompassing some twelve thousand unts, with a gross sales value of Dh118.3 billion, have been launched. Earlier indicators had shown that a slight correction phase, following a five-year bull run, had already started in the market. It is reported that the likes of Bayut and dubizzle saw established residential areas continuing to attract strong interest, particularly those with proven lifestyle appeal, mature infrastructure and sustained end-user demand. Indeed, there was robust interest seen in the market, for both ready and off plan properties. Leading locations, in the secondary market, for apartments were Jumeirah Village Circle, Business Bay, Downtown Dubai, Dubai Marina and Arjan and for villas, Damac Hills 2, Dubai Hills Estate, Arabian Ranches 3, Arabian Ranches and Dubai South. For off-plan demand, areas such as Majan, Jumeirah Village Circle, Dubai South, Jumeirah Village Triangle and Business Bay stood out for apartments. Villa demand was led by The Oasis by Emaar, The Valley by Emaar, Damac Lagoons, Dubai South and Mohammed Bin Rashid City. According to Bayut and dubizzle Property data, active users rebounded to 85% of the 2026 baseline by day fifty-eight of the conflict, while unique buyers returned to 87%.
An agreement between Dubai South and Majid Al Futtaim sees the Dubai developer spending US$ 16.89 billion to build a mixed-use master-planned community within the Dubai South district. Encompassing twenty-two million sq ft, the development will include residential, retail, and lifestyle components. Located near Air Maktoum International Airport, (which will become the world’s biggest airport in 2032), it will also include a large shopping mall positioned as a retail, entertainment, and lifestyle destination for residents and visitors. The development is in alignment with the Dubai Economic Agenda D33 and long-term plans to develop integrated communities that support sustainable urban expansion.
HRE Developments has officially broken ground on Sakura Gardens in Wadi Al Safa 2, Falcon City of Wonders, with completion slated for Q4 2028. The G+9 development is designed as a nature-led sanctuary across 49k sq mt of land, delivering 1.43k fully furnished residences centred around a car-free, 30k sq mt central park; about 50% of the project’s footprint is dedicated to landscaped green space. The community will feature over fifty world-class amenities, including a beach-style lagoon pool, rooftop gym, wellness pavilions, padel and basketball courts, running and walking trails, themed children’s areas, floating coffee kiosks, and full smart home automation across all units.
Nakheel, a member of Dubai Holding Real Estate, has introduced the Podium Villas at Palm Beach Towers, a limited collection of sixteen beachfront homes located at the gateway to Palm Jumeirah; handover is expected in H1 2027. Khalid Al Malik, Chief Executive Officer of Dubai Holding Real Estate, commented that “The Podium Villas at Palm Beach Towers build on that legacy with a limited collection of beachfront homes that offer space, privacy and access to an exclusive residents’ beach”.
Dubai-based HOLM Developments has appointed Aroma International Building Contracting as the main contractor for LINEA by HOLM, its second residential project in Jumeirah Garden City. Construction on the low-rise residential project began earlier this quarter, with handover scheduled for Q1 2028. The development will feature a rooftop infinity pool, rooftop padel court, gym, landscaped outdoor spaces, and children’s play areas.
Boli.ae has conducted Dubai’s first fully digital property auction, which could mark a transformation in the way that such transactions take place in the future. The UAE digital platform completed its inaugural digital real estate auction, which involved the sale of a 1.75k sq ft two-bedroom residence in City Walk, within just one week. The unit was listed with no reserve price and an opening bid of US$ 136k. To participate in the auction, a 10% refundable security deposit, (in this case US$ 14k), was required before any bidding was allowed. No sales price was readily available. This initial listing strategy was designed to test market depth and demonstrate the efficiency of Boli.ae’s real-time auction model.
This week, the Commercial and Residential Real Estate Price Index for Q4 2025 was released, highlighting continued strong growth across Dubai’s property market. Robust annual growth, at an annual 9.81%, was posted. A split of sectors, with annual growth figures include:
- villas 14.83%, driven by rising demand for larger residential spaces and integrated lifestyles
- apartments 7.38%
- commercial real estate 9.54% supported by continued momentum in Dubai’s economic and commercial activities
- office spaces 15.86%, reflecting strong demand for office space
- retail shops 11.52%
- hospitality sector 4.80%
- hotel apartments 6.25%
- hotel rooms 0.85%
The results reflected sustained demand and strong investor confidence, reinforcing Dubai’s position as one of the world’s leading real estate destinations. Younus Al Nasser, Chief Executive of Dubai Data and Statistics Establishment at Digital Dubai, said, “The results of Dubai’s Real Estate Price Index reflect more than the market’s continued growth. They highlight the strength and maturity of Dubai’s data ecosystem, which serves as a strategic enabler of economic decision-making across the emirate”.
It has been confirmed that the thirty-third edition of Arabian Travel Market 2026, which had been postponed, from its May opening, because of the Iran crisis, has been moved to the 14 – 17 September, following consultations with exhibitors and the global travel industry stakeholders. Danielle Curtis, Regional Portfolio Director – UAE, RX Global – noted that “our priority is always to ensure that ATM delivers the strongest possible platform for business, networking and partnership opportunities for the international travel community”. Under the theme, ‘Travel 2040: Driving New Frontiers Through Innovation and Technology’, the event will welcome the thousands of travel professionals and exhibitors that are expected to attend, reinforcing Dubai’s role as a major global hub for tourism and travel innovation.
Last year, UK/UAE bilateral trade in goods and services increased by 3.7% to US$ 33.51 billion, indicating continued growth in economic ties between the two nations. According to latest figures, both exports, by 4.1% to US$ 21.03 billion, and imports by 3.0% to US$ 12.38 billion, moved higher. The top five UK goods exports to the UAE were mechanical power generators, cars, medicinal and pharmaceutical products, telecommunication and sound equipment, and jewellery. The top five products imported were refined oil, mechanical power generators, jewellery, telecommunication and sound equipment, and scientific instruments. The UAE accounted for 1.3% of UK’s trade, ranking it as the UK’s twentieth largest trading partner, with UK FDI in the UAE, 1.0% higher on year at US$ 5.59 billion, equating to 0.2% of UK’s total outward FDI stock. The other side of the coin witnessed a 2.3% hike, to US$ 9.32 billion, in UAE investment in the UK – accounting for 0.3% of the UK’s total inward FDI stock.
This week the UK government announced that it had signed a trade deal with six-nation GCC bloc, worth an annual US$ 5.0 billion in the long run. The Starmer government added that the deal would be worth than double the previous US$ 2.15 billion estimate because the final deal went further on both trade liberalisation and service sector commitments than previously expected. The deal will remove 93% of GCC tariffs on British goods, equivalent to the removal of US$ 780 million worth of tariffs by the deal’s tenth year, with over 66% of the tariffs being removed as soon as the deal comes into force. In return, the UK has lowered tariffs to the GCC, though the countries’ main exports to Britain, oil and gas, that are already tariff-free. The government added that autos, aerospace, electronics and food and drink would be among the sectors to benefit, with cereals, cheddar cheese, chocolate and butter all becoming tariff-free.
At the start of the current crisis, Dubai Customs, in cooperation with Oman Customs, launched the “Green Corridor”, in March, to help maintain trade flows through alternative land routes linking Oman and the UAE. The initiative was designed to support supply chain resilience, maintain food security and reduce pressure on businesses affected by changing trade conditions. The route was activated within seventy-two hours of regional disruptions affecting key shipping lanes, with cargo arriving through Oman then transported by road into Dubai via the Hatta border crossing. In March, the value of transported goods topped US$ 272 million, (AED 1.0 billion), and had increased eightfold in April to US$ 2.18 billion, (AED 8.0 billion).
In a renewed affirmation of the success of its development model, built on proactiveness, flexibility and future readiness, the UAE Government has further strengthened its standing among the world’s most efficient and effective governments by securing its position among the top 10 globally in the 2026 Chandler Good Government Index.. This success has been brought about by its governmental approach in transforming national ambitions into tangible global achievements through the development of an integrated government ecosystem that combines policy efficiency, economic attractiveness, quality of life and investment in people. The CGGI is one of the world’s most comprehensive benchmarks for assessing government effectiveness, across one hundred and thirty-three countries, using metrics to highlight the success of the nation’s governance model, based on proactiveness, speed in delivery, governmental agility, readiness to address changes, and the ability to create opportunities while continuing to achieve leading competitive results globally. Mohammad Abdullah Al Gergawi, Minister of Cabinet Affairs, noted that “what has been achieved is the result of national teams that have made excellence a daily approach, innovation a way of work, and UAE leadership a global model to emulate in building the governments of the future”.
Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Mohammed, Dubai has unveiled a second US$ 409 million package of economic incentives, aimed at cutting business costs, supporting key industries and easing financial pressure across sectors ranging from tourism and education to construction and logistics. Combined with the US$ 272 million package that he approved in March, Dubai has now introduced US$ 681 million in economic support measures over the past two months. The package includes thirty-three initiatives that will be rolled out over the next three to twelve months.
Etihad Rail has posted that it has completed its first passenger station in Fujairah and that final preparations are underway at additional stations in Abu Dhabi, (Madinat Zayed), and Dubai, (Jumeirah Golf Estate); expansion plans are also under study. The utility had announced, earlier in the year, that it would launch three of eleven stations.
Emirates has broken ground on its new US$ 5.1 billion engineering complex at Dubai South, to be delivered by China Railway Construction Corporation, with Artelia as the project consultants. On completion, slated for mid-2030, it is expected to be the world’s most modern and advanced maintenance, repairs and overhaul (MRO) facility. It will span a staggering 1.1 million sq mt, making it one of the largest buildings in the world by volume and the largest steel structure in the GCC, whilst featuring the world’s only hangar complex with the ability to simultaneously service twenty-eight wide-body aircraft and two painting hangars. Other stand-out features include:
- the largest free-span hangar in the world at a width of two hundred and eighty-five mt
- the world’s largest dedicated landing gear workshop
- a 77k sq mt of dedicated workshop space for repairs and maintenance
- a 380k sq mt of storage and logistics capacity
- two state of the art paint hangars to service Emirates’ fleet of wide-body aircraft
- a new dedicated administrative building for Emirates Engineering, providing 50k sq. mt of office space and 15k sq mt of training facilities
- a gateway facility that will control airside access
Sheikh Ahmed bin Saeed commented that, “the new facility strengthens Emirates Engineering’s vertical integration strategy by bringing more skills, infrastructure, parts production, and specialist capabilities under one roof, while positioning the airline to serve as a strategic engineering partner for the future requirements of the regional and global aviation industry”.
Following coordination with relevant government authorities and applicable UAE tax regulations, VAT, at 5%, and starting on 01 June, will be levied on parking services provided by Parkin and toll tariff and activation fees under Salik. There will be no financial impact on either company, as monies collected will be remitted to the FTA. The parking service provider also revealed that cash payments at parking meters will also be phased out from 01 June, with payment through the nol card still available.
An indicator that investor demand is still buoyant, is that DP World, in the first four months of the year, attracted US$ 233 million in investments across Jebel Ali Free Zone. Those tenants are investing to develop and expand facilities across manufacturing, logistics, food production, healthcare, vehicle handling and heavy equipment. Interestingly, 43% of this total was invested in the two “war months” of March and April. Dubai’s oldest free zone, Jafza, is home to 12k businesses, continues to play a central role in supporting Dubai’s trade and industrial growth, even forty-one years after its foundation.
Dubai Holding recently announced collaboration with Microsoft, to embed AI at the core of its future operations, is the first of its kind in the MEA region. The strategy’s target is to drive a more consistent performance-led operating model across its portfolio as a global investment company in, inter alia, real estate, hospitality, retail, entertainment and community management. The Group’s employees will be equipped with access through a unified interface, allowing them to apply these tools directly within their day-to-day responsibilities, including the development and deployment of AI agents to automate routine tasks and streamline workflows. At the same time, they will be supported by a structured programme of training and enablement.
The UAE and Syria convened their first bilateral business forum in Damascus last week, with a large Emirati delegation of officials and businesspeople including Noon, which competes with the likes of Amazon in Dubai, which is planning to commence operations in Syria. The launch announcement was made by Mohamed Alabbar, who co-founded the e-commerce platform in 2017, with the Public Investment Fund; it has operations not only in the UAE but also Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and Egypt. The latest announcement builds on US$ 18 billion in investment pledges the Dubai-based billionaire entrepreneur has made whilst visiting the country over the past week. There seems to be a myriad of projects, split US$ 7 billion, for coastal developments, and US$ 11 billion for Damascus and its surroundings. It is expected that construction could start by Q4 2026. The Emaar founder is very bullish about the future of Syrian real estate expansion, (because it has never had any) and for other investment opportunities, including tourism. He thinks that “it is possible, within five years, to raise the number of tourists visiting Syria to eight million, which will reflect positively in the economic situation,” Syria is gradually rebuilding its tourism sector after the civil war and sanctions that isolated it from the global financial system. Regional investors are also keen to take advantage of the early opportunities to rebuild the war-battered economy of the country. The US has removed its Syria sanctions programme, with Congress repealing the Caesar Act in December – paving the way for investments in the country – having removed economic sanctions last May.
Emaar Properties has announced that it will exit the Syrian JV, to develop its mixed-use development The Eighth Gate in Yafour, Damascus. The Dubai-listed developer had launched the US$ 500 million master-planned community, spanning 300k sq mt, in 2005 and has now decided to operate the project independently without a local partner. Mohamed Alabbar, founder of Emaar Properties, said the company’s decision to exit the joint venture structure reflected its long-term confidence in Syria and its people. The developer confirmed that the project, which includes residential, retail, hospitality and commercial components, would follow the same operational and design approach used in destinations such as Downtown Dubai, Dubai Hills Estate and Emaar Beachfront.
The DFM opened the week on Monday 18 May on 5,709 points, and having shed one hundred and ninety-three points the previous week, lost sixteen points (0.3%), to close the week on 5,693 points, by 22 May 2026. Emaar Properties, US$ 0.16 lower the previous week, shed US$ 0.08 to close on US$ 3.13 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.73 US$ 7.57 US$ 1.98 and US$ 0.39, and closed on 22 May at US$ 0.71, US$ 7.53, US$ 1.99 and US$ 0.39. On 22 May, trading was at two hundred and fourteen million shares, with a value of US$ one hundred and forty-five million, compared to one hundred and seventy million shares, with a value of US$ one hundred and forty-nine million on 15 May. (The bourse will open on Monday and will then be closed for the following four days next week for the Eid Al Hada holiday and will open on Monday 01 June).
By 22 May 2026, Brent, US$ 0.73 (0.6%) higher the previous week, shed US$ 4.61 (4.6%), to close the week, on US$ 108.34. Gold, US$ 213 (4.5%) lower the previous week, shed US$ 40 (0.9%), to end the week’s trading at US$ 4,519 on 22 May. Silver was trading at US$ 77.11 – US$ 0.99 (1.3%) lower on the week.
Blastr, the Norwegian preferred bidder for UK’s third-largest steel producer, is requesting the embattled Starmer administration to provide guarantees for any environmental liabilities and the possibility of taxpayers underwriting risks associated with the purchase of Speciality Steel UK, arising from the turbulent ownership of Sanjeev Gupta, the industry tycoon. The company, with over one thousand employees, manufactures industrial steel products at sites including in Rotherham and Sheffield, and is one of Britain’s most important remaining major steel groups, supplying companies in the automotive and aerospace industries. It had been taken over by the government after Gupta was forced to surrender ownership of the “hopelessly insolvent” business. Blastr is not only seeking a package of government support, but also money from the National Wealth Fund. It has assembled a consortium which includes Cargill, the industrial conglomerate, and Tritax Management, which manages roughly US$ 12.0 billion-worth of logistics and supply chain real assets, to bid for SSUK.
OpenAI came out the winner in a critical US law case brought on by Elon Musk, as, after a three week trial, a US jury ruled against Elon Musk in his lawsuit against OpenAI; it took the jury just two hours to find that the case should have been introduced earlier and that OpenAI was not liable, to the world’s richest person, for having allegedly strayed from its original mission to benefit humanity. The verdict removes an obstacle that could now lead to a possible initial public offering that could value the business a cool US$ 1 trillion. Musk said he will appeal, repeating his claim that Altman and OpenAI President Greg Brockman viewed OpenAI as a means to generate wealth. Musk accused OpenAI, Altman, and Brockman of manipulating him into giving US$ 38 million, then going behind his back by attaching a for-profit business to its original nonprofit and accepting tens of billions of dollars from Microsoft and other investors. A Microsoft executive testified that the company had spent more than US$ 100 billion on its partnership with OpenAI.
After seventeen years, Airbus and Air France have finally been found guilty of corporate manslaughter by a Paris appeals court over the 2009 Rio-Paris plane crash that killed two hundred and twenty-eight passengers and crew; three years ago, the two parties, both of which have repeatedly denied the charges, were acquitted in a lower court. The appeals court ordered them both to pay the maximum fine for corporate manslaughter, US$ 262k, following the request of prosecutors during last year’s eight-week trial.
Making a case that there has been no slowdown for the AI boom, US chip giant Nvidia, a central player in AI infrastructure, posted record revenue Q1 figures, 85% higher on the year, at US$ 81.6 billion, as net income tripled to US$ 58.3 billion. (It expects Q2 revenue to top US$ 91.0 billion). Despite these mega results, its shares fell 1.6% in after-hours trading but with a book value of US$ 5.3 trillion, it is still recognised as the world’s most valuable company, with it representing 8% of the value of the S&P 500. It also forecast that AI spending, through until the end of 2029, will be at an annual US$ 3 billion to US$ 4 billion. Nvidia announced a US$ 107.35 billion share buyback programme and will return cash to shareholders by raising its quarterly dividend from US$ 0.01 to US$ 0.25 per share.
The latest bank to announce staff cuts, as it makes significant shifts towards AI, is Standard Chartered, shedding some 15%, (c7.8k staff), of its back-room staff by 2030; it has back-office operations in India, China, Malaysia and Poland. Some of those impacted by the move could well find other roles with the banking giant. The bank issued a statement which included, “we are scaling practical uses of automation, advanced analytics and artificial intelligence to streamline processes, improve decision‑making and enhance both client service and internal efficiency”.
Having been left with empty shelves, and a website inoperable for six weeks, last year saw Marks & Spencer counting the costs, with the retailer posting that the ‘incident’ cost US$ 176 million, described as “material system recovery, risk management and specialist advisory costs”. The retailer also revealed that the cyberattack was being investigated by the Information Commissioner’s Office and that M&S was cooperating with the investigations of the ICO and “other relevant regulators”. The actual numbers show that pre-tax profit fell 28.8% to US$ 488 million in the year, to 28 March, with revenue 25.0% higher at US$ 23.00 billion. The cyberattack led to a decision not to pay an annual bonus to the sixty-three thousand staff, including Stuart Machin, chief executive, and chairman Archie Norman. Machin added that “given the impact of the cyber incident on the performance of the business, the remuneration committee, and our executive directors, agreed not to operate the bonus scheme”. M&S shares surged 6.9% higher on the news.
In an US$ 850 million deal, French luxury group LVMH has agreed to sell fashion brand Marc Jacobs to a JV between brand manager WHP Global and apparel company G-III Apparel Group which owns brands including Karl Lagerfeld and DKNY. This deal points to a shift in the luxury sector where the likes of LVMH are rationalising non-core assets, while specialist brand managers and manufacturers become natural buyers for “accessible luxury. Similar deals have also done likewise, that is moving well-known brands from large consumer companies to brand managers, including Adidas’ 2021 sale of Reebok to Authentic Brands Group for US$ 2.4 billion in 2021. Last month, the Bernard Arnault-led luxury retailer posted that it had lost 1% off Q1 group sales attributable to lower Gulf spending and fewer tourists in Europe.
OAG, the global aviation consultancy and data provider, has posted that Singapore Airlines’ flights, operated by Airbus A350-900 aircraft, from New York and Newark to Changi Airport, were the two longest in the world, covering 15,332 km and 15,329 km respectively; Qatar Airways’ Auckland service was the third longest, spanning 14,526 km. Qantas took the next three places with direct flights from London to Perth, Melbourne to Dallas Fort Worth, and Paris to Perth, covering 14,499 km, 14,468 km and 14,265 km respectively. In seventh place, an Air New Zealand/Qantas-operated service from Auckland to New York, flown by Boeing 787-9 aircraft, ranked seventh, covering 14,209 km. Emirates slipped in at eighth position with its direct flight from Auckland to Dubai, followed by China Southern Airlines’ Mexico City-Shenzhen flight covering 14,124 km, and finally Singapore Airlines service from Los Angeles to Singapore. Interestingly. OAG noted that Qantas has ordered twelve specially configured ultra-long-range Airbus A350-900ULR aircraft capable of flying approximately 18k km non-stop, with the airline planning to launch direct services between Sydney and London – a distance of some 17k km – next year.
The latest from the EPL is that there is a proposal to allow clubs to negotiate settlements over alleged breaches of its financial rules which would negate the current status quo of their cases automatically referred to an independent commission; a vote will take place in June and the rule change, if approved, would be implemented immediately. The proposal was aimed at simplifying and accelerating the sanctions process when clubs are charged with breaking Profit and Sustainability Rules (PSR); these rules stipulate that EPL clubs are not permitted to lose more than US$ 140 million, over three years, with that figure reduced by US$ 29 million, for every season a club spends outside the top flight. In recent years. Both Everton and Nottingham Forest have received points deductions for PSR breaches. Last November, the EPL had announced that PSR would be scrapped, with a system known as Squad Cost Ratio (SCR) and Sustainability and Systemic Resilience (SSR) introduced in its place.
With Austria undergoing slowing growth, inflation and high energy costs, (like many other EU peers), its economic confidence indicators continued to decline, falling by 0.5 points, to minus 1.8 points, on the month. amid the impact of tensions in the ME on European markets. Analysts attributed the decline mainly to weaker sentiment in the services and construction sectors and a sharp drop in consumer confidence. The impact of the ME conflict on Austria’s economy is expected to continue through the winter. Geopolitical uncertainty and accelerating inflation, driven by higher fuel and energy prices, had pushed consumer confidence to its lowest level in two and a half years. It is expected that its gross domestic product would grow 0.8% in 2026, with average annual inflation.
Q1 saw the combined operating profits of three hundred and twenty-eight of five hundred major Korean companies surge by 158.6% to US$ 104.37 billion, with 60.6 % generated by the country’s two leading chipmakers; the combined operating profit of Samsung Electronics Co. and SK hynix Inc totalled US$ 63.28 billion. Sales during the same period rose 29.4% to US$ 693.4 billion. By company, Samsung Electronics posted the largest operating profit at US$ 38.19 billion, soaring 756.1% on the year, with the figure also surpassing the company’s total annual operating profit of US$ 29.10 billion recorded last year. SK hynix reported a 405.5% Q1 operating profit of US$ 25.10 billion.
In Q1, Japan’s economy grew, for the second consecutive quarter, posting an annualised real 2.1%, driven by a recovery in exports and private consumption. Over that period, GDP, adjusted for inflation, increased 0.5% on the quarter beating market expectations. Private consumption, which accounts for more than 50% of the economy, grew 0.3%, rising for the fifth straight quarter, as quarterly exports rose 1.7%, driven by a recovery in auto shipments bound for the US market and strong demand for machinery and electrical devices for industrial purposes. Imports edged up 0.5%, with nominal GDP 0.8% higher on the quarter at an annualised rate of 3.4%.
April annual inflation in Russia dipped 0.28% on the month to 5.58%, as consumer prices increased by 0.14% over the same period; food prices decreased by 0.2% on the month but increased by 4.02% on an annual basis. Other monthly and annual increases were noted in non-food prices by 0.26% and by 3.88%, and services increased by 0.47% and by 9.9%. April prices increased for compressed natural gas (1.2%), gas motor fuel and motor gasoline (0.6%), and diesel fuel (0.5%).
China has moved to protect its supply of sulphuric acid, the world’s most used industrial chemical, with this action having ramifications throughout the industrial world, for everything from food production to fashion and mobile phones. It is a crucial ingredient in the manufacture of batteries, clothing and phosphate fertilisers, and is also used to treat drinking water, purify petroleum and produce some metals and computer chips. However, China has to import the sulphur – a by-product of oil refining and smelting – to make the acid, but the problem is that 50% of sulphur emanates from the ME. Because of this impasse, China has had to ban exports of sulphuric acid to back up its domestic supply and portfolio. China’s. ban on exporting sulphuric acid, which came into effect on 01 May, was an attempt to protect their “downstream industries” from disruption. Now Australian – and other international – manufacturers have to decide how to circumvent the problem of a probable shortfall of sulphuric acid. The result is that Australian manufacturers are facing a conundrum – either stock up on the highly corrosive and combustible chemical or go without their key ingredient. Although the acid can be produced worldwide, China has been the lead, exporting a record five million tonnes. Last year, some seventy-three million tonnes of sulphur were produced globally, with the ME accounting for some 50% of global trade. Sulphur has been hit by the double whammy of being unable to be exported, via the Strait of Hormuz, and the damage to the facilities that produce the chemical has been extensive. Two other sulphur problems are that it could be years before damaged facilities are back to pre-war capacity, and with demand also coming from the metal industry. which can absorb higher prices, that fertiliser production could not compete. The current lack of global sulphur and sulphuric acid has also resulted in key fertilise producing countries, like South Africa, having to cut back their output of fertilisers which in turn will have a negative impact on future crops.
Both sides of the Australian political landscape want to turn back the clock on the Australian tax system – but not to the same time. The Albanese government wants to return to the system of adjusting income tax scales for inflation that it introduced fifty years ago and reversed in 1982, and the Labour opposition to return capital gains tax to the pre-1999 system of adjusting for inflation instead of simply halving it. The former would see lower taxation and a cut in revenue in contrast to Labour’s position that would increase taxes and raise more revenue.
There is no doubt that halving the capital gains tax in 1999 was a major cock up as this action, by the Howard/Costello administration, became the catalyst to rising house prices. A quarter of a century later, it is obvious that the National Housing Accord plan to build more houses, and make them more affordable with more supply, is not working. Two more factors were also responsible for house prices starting to rise at twice the rate of income after 2000 – from 2005, there was a massive increase in immigration, (with no increase in housing construction), and in 2008, and the GFC, Australian banks were transformed from business lenders to aggressive home mortgage marketers as a result of risk-weighting changes to capital rules.
It does seem that there were not too many deals signed during Donald Trump’s two-day official visit to Beijing which had seen a large number of American CEOs in his entourage. However, one deal saw Boeing’s CEO, Kelly Ortberg, present when a two hundred plane deal was approved – the first such sale in a decade. On the return Air Force One journey, the US president confirmed that China reserved the right to buy as many as seven hundred and fifty Boeing aircraft as part of a deal reached during the summit and that the deal would also benefit General Electric, which he said would supply four hundred to four hundred and fifty engines to China. Prior to the onset of the 2020 pandemic, almost a third of the narrowbody airliners Boeing delivered went to China. But since then, the company’s business there has plummeted as US-China relations soured.
The impact of the Iran war has begun to disturb the UK economy, with job vacancies falling to their lowest level in five years while the unemployment rate nudged 0.1% higher to 5.0% in the three months to March. As long as the war continues, so will the UK unemployment count. However, the combination of rising unemployment, and a slowing wage growth, will give the BoE more time to consider whether a rate rise is required to contain inflation. To make matters more alarming, the number of job openings fell by 3.9% to 705k – its lowest level since April 2021 – whilst payroll employment figures fell by 100k last month. The Office for National Statistics noted that “lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year”.
The Office for National Statistics confirmed that UK April government borrowing, (the difference between spending and borrowing), was 12.5% higher, on the year, at US$ 32.61 billion – more than expected. The figures showed spending by government on benefits rose by US$ 3.62 billion from the same point last year, driven by inflation-linked increases to many benefits and the earnings-linked rise to the state pension. A record high for any April return saw debt interest payments, 11.0% higher, at US$ 13.82 billion. It is expected that public sector borrowing is likely to remain on the high side in the coming months, and could see Chancellor Rachel Reeves, (if she is still in office), make more tweaks to fiscal policy at the time of the autumn Budget.
| Headline inflation in the UK temporarily eased 0.5%, on the month, to a fourteen-month low of 2.8% in April, attributable to Ofgem, the energy regulator, lowering its energy price cap, by 7.0%, last month. Food prices, particularly for chocolate and meat products, and the price of package holidays, drove inflation down further. However, it is widely expected that inflation will remain higher than the BoE’s 2.0% target for the foreseeable future, driven by much higher energy prices. Core inflation, which excludes energy, food, alcohol and tobacco prices, dipped 0.6%, on the month, to 2.5%. However, the writing on the wall comes from other figures with sharp increases posted for the cost of raw materials heading into factories – a 2.4% monthly hike to 7.7% – and the cost of factory gate prices, up 1.0% to 4.0%. The Starmer administration has announced that it will ease sanctions on Russian-derived diesel and jet fuel because of the current energy shortage in the UK brought about by the ME crisis. The embattled PM claimed these changes would mean “more pressure on Russia” and not less. He said that the changes were part of a “strong new package of new sanctions” on liquified natural gas and refined oil products from Russia. It is hard not to disagree with Kemi Badenoch arguing that Starmer “is so deep in the bunker he is importing sanctioned Russian oil, he’s nationalising steel, he’s imposing price controls in the supermarkets – it’s like the Soviets won”. UK has been warned by Ukraine that it risks funding “Russia’s war machine”. The government eased the sanctions on oil which is processed in third countries, ie not in Russia, but in the likes of Turkiye and India. Last October, it announced plans to ban oil products, such as diesel and jet fuel, which had been refined from Russian crude oil in third countries; now it has decided to pare them back on a temporary basis. The PM opined that he was not lifting sanctions “whatsoever”, but whatever he did has not impressed that country’s president, Volodymyr Zelensky or a few of the coalition of bilateral partners, of which Keir Starmer is a leading light. It was only a few months ago that his government announced what it called its “biggest sanctions package” against Russia, specifically targeting Russian oil revenues. For years the UK led international efforts to put economic pressure on Russia for its war on Ukraine. Only on Tuesday it signed a G7 statement reaffirming its “unwavering commitment” to impose “severe costs” on Russia. In 1972, Bougainville Copper started operations on the island of Bougainville and quickly became one of the largest copper producers globally. At its peak, Panguna was one of the world’s largest copper and gold mines. Between its start date and 1989, the mine reportedly produced: more than three million tonnes of copper more than nine million ounces of gold and substantial silver production The mine: generated about 45% of Papua New Guinea’s export revenue contributed roughly 12% of PNG GDP provided around 17% of the PNG government’s internally generated revenue at one stage Over the next seventeen years, Bougainville Copper Limited, and the Panguna mine, generated enormous wealth between the start date and 1989. Not all locals were happy with the status quo, as these benefits were distributed very unevenly, which became one of the main causes of the Bougainville civil war. Rumblings had started towards the end of the eighties. Tensions over the Panguna mine escalated, leading local landowners to sabotage operations and form the BRA, in 1988, which quickly evolved into a broader secessionist movement. Led by former Bougainville Copper employee, Francis Ona, the paramount leader and Supreme Commander of the BRA fought the Papua New Guinea Defence Force (PNGDF) in the “Bougainville Crisis”—a violent, decade-long civil war sparked by disputes over the environmental and economic impacts of the Panguna copper mine. On 15 May 1989, mine production was suspended following attacks on employees and damage to power lines by militants. The militant activity was driven by local landowner grievances and environmental damage, which ultimately sparked the Bougainville Civil War. CRA (Conzinc RioTinto of Australia) began withdrawing its personnel from Bougainville and by early 1990, continued militant action, escalating attacks from the Bougainville Revolutionary Army (BRA), severe civil unrest and damage to assets prompted the company to evacuate remaining personnel, completing the evacuation of its Panguna mine site on 24 March 1990. The withdrawal of company personnel was completed, after which no care or maintenance of the assets was provided. Apart from Francis Ona, two other key leaders were Samuel Kauona, previously a PNGDF soldier, who defected to lead the BRA’s military operations and guerrilla campaign; he was a signatory to several ceasefires and peace initiatives. The second was Joseph Kabui, a key member of the BRA, who, in 2005, became the first President of the Autonomous Bougainville Government in 2005, after ultimately helping negotiate a peaceful end to the conflict. The decade-long Bougainville Crisis lasted from 1989 – 1998, with the PNGDF imposing a crippling blockade on the island, with the subsequent war and blockade resulting in up to twenty thousand deaths. The previous year saw a New Zealand peace process and, after several ceasefires, led to the signing of the Bougainville Peace Agreement in 2001, which eventually resulted in a peace process, decommissioning of weapons, and the formation of the Autonomous Bougainville Government. It took a further eighteen years, and the eventual conclusion of hostilities, to a historic, non-binding referendum in 2019; 97.7% Bougainvilleans voted for independence from Papua New Guinea. The BRA disbanded as a military force following the peace agreements, with its former members integrating into society and political leadership. Since then, the region has operated as the Autonomous Bougainville Government (ABG), with Ishmael Toroama as its president. He has set 01 September 2027 as the target date for independence., but the move still requires official ratification from Papua New Guinea’s national parliament, under the peace agreement that ended Bougainville’s civil war. Bougainville is now drafting its own constitution and preparing government systems for possible nationhood. Its main revenue stream will be its significant copper and gold resources, (especially around the historic Panguna mine); it has been estimated that mine revenues accounted for about 45% of PNG’s export earnings before it closed in 1989. Other revenue streams would include niche tourism, cocoa, copra, vanilla, tuna fishing, timber and tropical fruits. Indeed, a diversified export agriculture sector could provide stable foreign exchange and reduce dependence on mining. Bougainville, with a population of some three hundred and forty thousand, has a bigger land mass when compared to the likes of Fiji, Tonga and Samoa. It would rank as the eighth most populated Oceanic nation behind Australia, PNG, Western New Guinea, New Zealand, Hawaii, Fiji and Solomon Islands. It would have the sixth biggest land mass, encompassing 19.4k sq km. It would become the one hundred and ninety-fourth member state of the United Nations. The main question is whether Bougainville, the country, would survive? It has several plus factors including valuable copper and gold resources, a strong national identity and a strategic location in the Pacific which could attract diplomatic support, aid and investment from countries such as US, Australia, Japan and China. (The danger here is becoming over dependent on foreign donors). Any new administration would have to consider and solve potential problem areas including over dependence on one source of income – mining – possible future disputes with landowners, infrastructure redevelopment, weak institutions, trained manpower to run government departments and the ‘canary in a coal mine’ – corruption or elite capture of mining revenues. If it could quickly become economically self-sustaining and politically stable, there is no doubt that Bougainville will become, after nearly forty years of trouble and strife, the Island Full Of Dreams! |
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