Sick Man Of Europe!                                                       06 December 2024

Latest data from Cushman & Wakefield Core, indicates that the Dubai property market is till firing on all cylinders and, that for the seventeenth consecutive quarter, continued moving higher, with Q3 posting a 20.0% annual increase; villas and apartments registered 23% and 19% rises in the period. The consultancy noted that suburban and affordable communities are leading the market. Highest price increases were seen in Discovery Gardens, Jumeirah Lakes Towers and Dubailand (Remraam) – with hikes of 43%, 34% and 28% – mainly attributable to relatively lower price points in these areas and the substantial price growth in central districts. There is a definite move that sees growing demand for value-driven investment opportunities in suburban areas, as prices, in nearer city areas, are becoming unaffordable for an increasing majority of the population.

Knight Frank also noted that 2024 average home prices have risen 20% – and it expects the bull run – that started post Covid, will continue into 2025. It sees residential values are set to rise 8% next year while they will increase 5% on average for luxury properties. To this observer, this seems very much on the low side.

The consultancy also calculated that nearly 20% of homes in Dubai are worth in excess of US$ 1 million. It estimated that “accidental millionaires”, were the result of owners who bought properties for less than US$ 1 million that are now worth more, purely due to price inflation; only homes that have not traded hands have been counted. It continued that “of the 530k homes sold since 2002, 95k are worth over US$ 1 million today, which equates to a combined total value of US$ 224 billion.” Further data shows that homes, valued at over US$ 1 million, have jumped from just 6.3% of all sales in 2020 to 18.1% today, and that. the total value of all homes sold in Dubai since 2002 currently stands at US$ 400 billion, which is up 221% since 2020.

Its report noted that house prices in Dubai were 19.9% higher on the year. Furthermore, factoring for potential downside risks to the market, the most significant of which is the threat of a global economic slowdown,” the study noted that Dubai’s prime residential market will see a more modest growth of nearly 5% next year. The consultancy expects a further 300k residential units over the next five years, equating to an annual 60k; the apartment/villa split will be roughly 81.5/18.5 or 48.9k/11.1k.  However, very rarely will all projections come to fruition and, that being the case, a more realistic figure would be around 20% lower at 39.1k/8.9k units.

November recorded another busy month, with a total of 13.5k property sales along with an overall value of US$ 10.90 billion. fäm Properties estimated that there was an annual 31.2% increase for apartment sales transactions to 10.9k, valued at US$ 5.42 billion. In contrast, villa sales volume was 35.8% lower, with 1.9k being sold for US$ 2.78 billion. Plot sale volumes were 39.6% lower at US$ 2.21 billion, whilst there was a 5% increase in volume for commercial sales, at three hundred and fifty-four, valued at US$ 354 million

The average property price per sq ft has continued its growth over the past four years; in 2021, the figure was at US$ 304, rising to US$ 357 the following year and then to US$ 374 by the end of 2023; its latest value is now at US$ 408. Dubai property sales for the month of November have now risen in volume over the last five years from 3.8k transactions (US$ 2.02 billion) in 2020 to 7.0k (US$ 4.88 billion) in 2021, 11.1k (US$ 8.45 billion) in 2022, and 12.2k (US$ 11.55 billion) in 2023.

In November, the top five performing areas in November were:

Jumeirah Village Circle           – 1,528 transactions               worth US$ 436 million

Dubai Marina                          – 838 transactions                 worth US$ 845 million

Business Bay                           – 809 transactions                  worth US$ 736 million

Jumeirah Village Triangle       – 717 transactions                 worth US$ 163 million

Wadi Al Safa 5                        – 672 transactions                 worth US$ 155 million

Vida Residences Club Point was the best-selling off-plan apartments project in terms of value, with two hundred and twenty-seven apartments, being sold for US$ 146 million. Greenridge was the top-selling off plan villas project, with one hundred and thirteen units being sold for US$ 102 million. For ready apartments and ready villas, Maya 3 saw one hundred and three transactions, valued at US$ 14 million, with fourteen villas, worth US$ 12 million, being sold. First sales outnumbered resales by 56:44 and 52:48 in volume and value. An analysis based on prices reveals:

below the US$ 272k mark                              32%

between US$ 272k – 544k                            32%

between US$ 545k – 817k                            17%

between US$ 817k – US$ 1.365 million        12%

more than US$ 1.365 million                         8%

Another factor involved in the current evolution of the Dubai realty sector is a marked uptick in the number of international investors finding interest in the emirate’s off-plan properties, which, compared to the likes of London, Sydney, New York, Hong Kong, Paris, and Singapore, are significantly cheaper. With demand increasing – both locally and globally – some developers are taking advantage, by introducing more aggressive payment plans. Such schemes ensure projects are being internally financed and that delivery times are met.  On the flip side, purchasing property is becoming more challenging for lower income families, (because of the need for a higher deposit).

The latest Savills study confirms Dubai’s retention as the global leader when it comes to branded residences. Currently, there are seven hundred and forty completed branded residences worldwide, with a further seven hundred and ninety anticipated by 2031, across one hundred countries. Of that total, Dubai can take claim for one hundred and forty projects, including completed and projected over the forecast period. These projects range from hotel-branded residences to non-hotel collaborations with known designers. The ME market is expected to dominate the global sector, expanding by 270%, over the next seven years. Rico Picenoni, Head of Savills Global Residential Development Consultancy, commented that “over the next five years, we anticipate the entry of sixty new brands into the market, with branded residences expanding into regions such as Romania and Tanzania. The ME, and particularly Dubai, remains at the forefront of this growth.”

Globally, hotel-branded residences accounted for 79% of developments this year, with two-thirds positioned in the luxury segment; Marriott International is the leading parent company, with The Ritz-Carlton being the most prominent hotel brand. For non-hotel branded residences, YOO stands out as the market leader.

As we come to the end of another mega-year for the realty sector, Dubai’s ultra-luxury real estate landscape shows no signs of a slowdown, that many “experts” had thought would occur. YTD, the highest values for an apartment and a villa sale have been US$ 65.5 million for a five-bedroom ready apartment, at The One Residences, Palm Jumeirah, and a seven-bedroom, off-plan villa at EOME Residences, Palm Jumeirah, selling for US$ 55.3 million in September.

An under-development, forty-storey DIFC tower, set for completion in 2028 and owned by H&H Development, has been acquired by Aldar for a reported US$ 627 million. The project encompasses a commercial and retail space split. This is not the first Dubai foray for the mega Abu Dhabi developer. It has already announced a new commercial tower on SZR, along with two upscale residential communities, and the ‘6 Falak’ in Dubai Internet City from Sweid & Sweid. 

Earlier this year, the government announced its real estate strategy, with the three main aims being to double the real estate sector’s contribution to Dubai’s GDP to US$ 19.89 billion, (AED 73.0 billion), increase real estate transactions by 70% to reach US$ 272.47 billion (AED 1 trillion by 2033), and to grow the value of real estate portfolios twentyfold to US$ 5.45 billion (AED 20 billion).

In H1, there was a 25.0% surge in the total value of real estate transactions, totalling US$ 48.38 billion, driven by the ongoing Expo 2020’s legacy impact, a slowly recovering global economy, and Dubai’s increasing appeal as a safe haven for investors amid global uncertainties. Over the next five years, it is estimated that some 19.8k properties, equating to just under 7.0% of the total upcoming inventory of 283.9k, will be priced in the US$ 1.36 million plus, (AED 5 million) sector; properties, with a value of over US$ 8.17 million, (AED 30 million), will account for less than 1.0% of the total builds. Both figures indicate that these two sectors will continue with increased demand because of the relative dearth in supply. If the estimated influx of UHNWIs reaches an annual 6.5k, then it is obvious that the estimate of 19.8k supply of properties, over five years, will be unable to satisfy demand which in turn will push prices higher in this sector.

Metropolitan Premium Properties is claiming that it has managed one of the ‘biggest single-unit rental deals’ in Dubai – the A penthouse at The Royal Atlantis Resort and Residences on Palm Jumeirah which has been rented out for US$ 1.2 million – becoming one of the ‘biggest single-unit rental deals’ in Dubai, and probably the ‘most expensive’ apartment lease in the city’s history. The tenant is a high-net-worth European family who is returning to live and work in Dubai after a stay abroad and moving into the 10k sq ft four-bedroom penthouse which includes a living and dining area, a library, and an exercise room – all fully furnished.  Furthermore, it boasts a 2.7k sq ft terrace and a transparent infinity pool, with use of all the hotel amenities.

Dubai-based luxury hotel chain Jumeirah Group, founded in 1997 and a member of Dubai Holding since 2004, has a global portfolio of twenty-six properties. This week, it announced that it has expanded into Africa, in partnership with Thanda Group to open two new destinations – Jumeirah Thanda Island in Tanzania, (an exclusive-use remote island), and South Africa’s Jumeirah Thanda Safari, located in in one of the Big Five private game reserves.

Over the past thirty years, HH Sheikh Mohammed bin Rashid has changed Dubai’s public services beyond belief, with the mantra, developed over the three decades, that the government is always ready to serve the people — online and offline. The Dubai Ruler noted that “we have established a culture of open doors for the people”, and “is a culture of having no doors at all before the people. Dubai’s global reputation today is a natural outcome of its swift services and an open work environment that prioritises people.” Part of his strategy, to maintain the very high standards that he has set, is to openly hold officials – from top to bottom – accountable. Following a recent “mystery shopper exercise”, HH noticed that three officers had gone as far as placing “managers, secretaries, and building security at their doors”, so he sent out a clear message –  “the key to our success lies in serving people, simplifying their lives, and maintaining constant communication with them. These are our governmental principles—they have not changed. And to those who think we have changed; we will change them.” In 2020, HH Sheikh Mohammed introduced the UAE Mystery Shopper app through which residents can help rate government services. This service allows people to evaluate their overall experience at government centres, including factors like employee attitude, waiting time, payment issues, and even parking management.

Today, HH Sheikh Mohammed appointed Marwan bin Ghalita as the new acting DG for Dubai Municipality; he is a graduate of the government’s leadership programme, with the Dubai Ruler noting that “he has a good reputation for his communication with the public, facilitating their affairs, and cooperating with other institutions.” He also recognised the former DG, Dawood Abdulrahman Al Hajri, who had been in the position since 2018, for “his efforts, work and dedication during the previous years in Dubai Municipality”. At the same time, he expressed his appreciation for Mattar Al Tayer, who has supervised a number of government institutions – including the DM and the Dubai Land Department – over the years. HH concluded by saying, “today, these institutions are starting a new phase in their service and economic work and are continuing their journey to make Dubai the best city to live in the world.”

Dubai Duty Free has announced its YTD sales had topped US$ 1.94 billion by the end of November – well on its way to exceed its 2024 target of US$ 2.0 billion; last month, it posted monthly revenue of US$ 205.67 million – the fifth best ever month in its forty-one-year history, with CEO, Ramesh Kidambi, commenting that “we look forward to achieving more milestones in December”. Perfume sales were 10% higher at US$ 362 million and gold sales up 2%, at US$ 195 million, with electronics sales reaching US$ 134 million.

In line with the government’s directives to transition 80% of taxi trips to e-hailing in the coming years, Bolt launched its operations in the UAE on Monday. The company, which operates in over fifty countries, will initially have a fleet of limousines, listed by reputed fleet partners on the Bolt platform, including Dubai Taxi Company vehicles. Using the user-friendly Bolt app, consumers can easily book rides, track their driver, and make payments through their app. The next phase of expansion will include the introduction of taxi services on the app, creating a versatile and sustainable mobility ecosystem in Dubai. The CEO of DTC, Mansoor Al Falasi, said, “since the announcement of the launch of Bolt in October this year, we are pleased to see its operations come to fruition”.

At the fifteenth session of the Arab Ministerial Council for Electricity, attended by electricity and energy ministers and delegations from twenty-two Arab countries, the launch of the Arab Common Electricity Market was announced; its main purpose is to achieve regional integration in the field of electrical energy. Two agreements were signed – the “General Agreement,” which defines the goals of the market and mechanisms for its development, and the “Market Agreement,” which sets the institutional and commercial framework for the market, including governance of operations and cooperation between member states.

The Dubai Commercial Court has dismissed a US$ 5.6 million lawsuit, filed by an Emirati plaintiff, against a real estate development company for allegations of financial mismanagement and failure to deposit US$ 6.4 million funds into the project’s escrow account, toward purchasing units in a real estate project in Dubai’s Al Barsha area. However, a court-appointed financial expert determined that the real estate company completed the project and that the plaintiff had resold most of the units for a profit, negating any claim of financial loss. The court ruled that there was no breach of obligations by the defendants and ordered the plaintiff to cover all legal costs of the case.

The UAE becomes the first country in the region to officially join the Eurasian Group on Combatting Money Laundering and Terrorist Financing (EAG) as an observer – a sure sign of the country’s commitment to enhance both regional and global efforts to fight money laundering and terrorist financing. The EAG, established in 2004, includes nine member countries across Eurasia – Belarus, China, India, Kazakhstan, Kyrgyz Republic, Russia, Tajikistan, Turkmenistan and Uzbekistan – and works closely with the FATF. The UAE’s new observer status joins that of sixteen other countries and twenty-three international organisations.

More than eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee, in 2020. The controls were removed in March 2021 to reflect the movement of the market once again. Last Sunday, retail prices saw price reductions of up to 4.9% for petrol, with diesel moving marginally higher, (after November’s slight 2.5% – 3.3% reductions for petrol and 11.0% for diesel). The breakdown of fuel prices for a litre for December is as follows

• Super 98     US$ 0.711 from US$ 0.747              in Dec (down by 4.8%)         down 7.4% YTD US$ 0.768     
• Special 95   US$ 0.681 from US$ 0.717             in Dec(down by 4.9%)          down 7.7% YTD  US$ 0.738         
• E-plus 91   US$ 0.662 from US$ 0.695               in Dec (down by 4.7%)          down 7.9% YTD   US$ 0.719
• Diesel         US$ 0.730 from US$ 0.7.28               in Dec (up by 0.03%)            down 10.6% YTD US$ 0.817

The DFM opened the week, on Wednesday 04 December, (after the National Day holidays), one hundred and twenty-one points (2.6%) lower the previous week, gained 128 points (2.7%), to close the trading week on 4,854 points by Friday 06 December 2024. Emaar Properties, US$ 0.20 higher the previous three weeks, gained US$ 0.04, closing on US$ 2.64 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.72, US$ 5.45 US$ 1.86 and US$ 0.38 and closed on US$ 0.76, US$ 5.35, US$ 1.84 and US$ 0.38. On 06 December, trading was at five hundred and seventy-eight million shares, with a value of US$ 160 million, compared to two hundred and ninety-five million shares, with a value of US$ 220 million, on 29 November.  

By Friday, 06 December 2024, Brent, US$ 2.23 lower (3.0%) the previous week, shed US$ 1.70 (2.3%) to close on US$ 72.94. Gold, US$ 44 (2.8%) shed the previous week, lost US$ 17 (0.6%) to end the week’s trading at US$ 2,657 on 06 December 2024. 

Earlier in the week, Russian gas producer Gazprom noted exports through Ukraine to Europe would be 40.8 million cu mt – 2.9% lower than the 42.0mcm noted in recent months. Russian gas exports, via Ukraine, are scheduled to stop on 31 December, as a five-year transit deal with Kyiv expires. Russia halted gas supplies to Austria’s OMV, in mid-November, due to a contractual dispute and a court decision to award the Vienna-based company, US$ 242 million relating to irregular supplies to its German unit in 2022. However, other unnamed companies stepped up to buy the remaining Russian gas, thus keeping the flows from Siberia stable.

Carlos Tavares, the chief executive of Stellantis – which owns brands including Vauxhall, Jeep, Fiat, Peugeot and Chrysler – has abruptly left the car giant, with Henri de Castries, its senior independent director, saying “Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the chief executive. However, in recent weeks different views have emerged which have resulted in the board and the chief executive coming to today’s decision.” Only two months ago, the company had issued a profits warning and last week had also announced plans to close its Luton Vauxhall van-making factory.  When the news broke on Monday, Stellantis lost roughly US$ 3.09 billion in its market cap.

Mark Tucker joined HSBC, from Hong Kong-based insurer AIA, in March 2017, when Europe’s biggest bank broke tradition by choosing an outsider to replace veteran Douglas Flint. Seven years later, the bank has appointed head-hunters to start the recruitment of its next chairman and is open to existing non-executive directors and outsiders to succeed him. This comes at a time when Georges Elhedery, its new CEO, began a major restructuring of the bank, slimming down his management committee and has had hundreds of managers reapplying for jobs. In June 2019, Tucker was appointed board chairman of the private-sector membership body and industry advocacy group, TheCityUK, succeeding John McFarlane, and last year was named a member of the McKinsey & Company External Advisory Group.

In the UK, regulation expert Dr Maria Luisa Stasi has filed a claim against Microsoft, on behalf of UK businesses, that could reap, if successful, over US$ 1.27 billion; the case, filed with the Competition Appeal Tribunal, alleges that the tech giant overcharged firms for access to its products. It accused Microsoft of leveraging its dominant market position to induce customers into moving to its cloud computing services. She commented, “put simply, Microsoft is punishing UK businesses and organisations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server. By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”

Despite having previously indicated that it thought that a merger between Three and Vodafone would see tens of millions of users paying more for their services, the Competition and Markets Authority has approved the creation of the UK’s biggest phone network; it will be contingent on the new entity spending billions to improve 5G internet services across the network, capping some mobile tariffs and offering preset contractual terms to mobile virtual network operators, mobile providers that do not own the networks they operate on, for three years.

Airbus will cut nearly five hundred jobs in the UK, as it announced that its global work force will lose more than 2k jobs, (5% of its employees), by 2026. The strategy is based on scaling back its space business and trying to trim its “fixed cost base”, as profits continue to dip, (by 22% to US$ 2.29 billion), despite revenue rising, (up 7% to US$ 56.68 billion); the space arm of its business will take the brunt of cuts, losing 56% of the total. The job cuts will also be spread out geographically, with Germany, France, UK, Spain and the rest of the world losing six hundred and eighty-nine, five hundred and forty, four hundred and seventy-seven, three hundred and three and thirty-four respectively.

Although still working at 100% production capacity, Guinness has had to limit the amounts pubs can buy in the run up to Christmas, after “exceptional demand” over the past three weeks. The main drivers behind this decision are that demand for the “black stuff” has been rising in popularity with women and young people, whilst recent rugby internationals have put a strain on supplies. It appears that Diageo is allocating supplies, on a weekly basis, with a spokesman adding “we have maximised supply and we are working proactively with our customers to manage the distribution to trade as efficiently as possible.” It has been expanding operations in its St James’s Gate brewery in Dublin and also building a new brewery in County Kildare. Figures show that between July and October, overall beer drinking was slightly down, but the volume of Guinness, consumed from kegs, was up more than 20%.

Orano, the French nuclear firm, confirmed that its uranium mining operations have been taken over by the recently installed military government in Niger. Having seized power in a July 2023 coup, the newly installed administration withdrew Orano’s permit to exploit one of the world’s largest uranium deposits, as well as expelling French troops. Orano, a 63% stakeholder, then suspended production. This week, authorities in the country took over control of its Somair uranium mine as the military-led government, (a 37% shareholder), continues to step up pressure on foreign investors in the West African country.

The Australian Competition and Consumer Commission has approved the alliance of Virgin Australia and Qatar Airways which will allow Virgin to commence twenty-eight new services a week between Australia and Doha. Qatar’s chief commercial officer, Thierry Antinori,commented that “we are pleased to be helping Virgin Australia launch these new services to Qatar and creating business opportunities for our travel trade partners.” The full deal between the airlines will see Qatar become a 25% shareholder in the Australian carrier.

Better late than never, Australia has introduced so-called “Tranche 2” laws that will stop real estate agents being able to accept suitcases full of cash as payment. It will bring Australia, (that had been only one of five countries globally to not include these high-risk professions in the AML/CTF regimes and was at risk of being ‘grey listed’), into line with similar nations, and stem the process of criminals converting illegal profits into money that looks legitimate. The Transparency International Australia CEO posted that, “for many years, Australia has been a go-to destination for kleptocrats, corrupt officials and organised crime gangs to wash their ill-gotten gains into our economy, particularly in the real-estate sector.” It did add “the carve-out for lawyers to claim legal professional privilege does create a risk of lawyers being the profession of choice for money launders and not reporting suspicious matters to AUSTRAC. Australia weak corporate transparency laws also enable corruption and money laundering to take place. In order to further safeguard Australia against money laundering and corruption, the parliament must pass strong beneficial ownership laws as promised by the Albanese government.”

Many Australians are raising concern about the amount of money, in its superannuation funds, being channelled to overseas construction activities when there is a need for the same kind of investment to plug the housing crisis at home. AustralianSuper, the country’s largest fund, is funnelling hundreds of millions of dollars into the development of a massive “new town centre” development, Canada Water, the first in London for fifty years; it will add 3k net-zero homes and office space for some 20k. In March 2022, AustralianSuper announced its 50:50 partnership with UK property developer British Land to work on this project. The fund’s initial investment is valued at US$ 325 million which some may argue would be better placed in its home country where there is the need to build “1.2 million homes over the next five years to address the national housing supply crisis”. As of 2024, the superannuation industry is worth about US$ 3.9 trillion, with only 6.7%, (a ten-year low), going into the property market. AustralianSuper has more than US$ 2.92 billion in the international property market — in the UK and North America — compared to more than US$ 5.20 billion in Australian and New Zealand properties. In November last year, Australia’s third-largest super fund Aware Super announced it invested more than US$ 6.50 billion in the UK and Europe, whilst Aware Super already has U$$ 1.62 billion invested in the international property market and US$ 4.86 billion in the Australian property market.

Interestingly, a twenty-three party of Australian business leaders, academics, urban planners and various consultants recently visited London to look at the project, which they concluded was facing the same challenges of delivering enough housing to keep up with population growth, as the Moore Point development in Liverpool, in south-west Sydney. Its leader, Christopher Brown, commented that, “we’d like to see Australian superannuation funds investing Australian workers’ money into affordable housing.” He also noted that, “ten years in, this project has finally been given the right to go on approval for the public to have a say, and that’s with a supportive council,”  comparing it to Canada Water’s project promises to deliver 11k homes and 23k jobs, with at least ten hectares of public spaces along the river, and that “crusty old England can move projects through from conception to development in a third of the time Sydney’s looking at.” He has called upon all levels of government to overhaul the planning system so that it “doesn’t take ten years to get from conception to exhibition and then another ten years to develop”. According to the federal government’s 2024 budget papers, Australia “has among the lowest number of homes as a proportion of the population in the OECD”.

Thanks to the election of Donald Trump on 05 November, the world’s biggest cryptocurrency, Bitcoin, reached US$ 100k, (valued at US$ 103.3k yesterday morning, having surged 7.9% over the previous twenty-four hours), for the first time. Since his victory announcement, it has risen by over 48% from its then value of US$ 69.4k. Five years ago to the day, Bitcoin was trading at US$ 7,521 – today it is trading at US$ 99,029, more than thirteen times higher.

The World Bank’s Fund for the poorest nations will be boosted by donor counties pledging US$ 100 billion, over a three-year period, that will give them a vital lifeline for their struggles against crushing debts, climate disasters, inflation and conflict; this is 7.5% higher than the US$ 93 billion IDA replenishment announced in December 2021 but short of the US$ 120 billion goal that some developing countries had called for. The International Development Association provides grants, and very low interest loans, to some seventy-eight low-income countries. About US$ 24 billion will be contributed directly to IDA, but the fund will issue bonds, and employ other financial leverage, to stretch that to the targeted US$ 100 billion in grants and loans through mid-2028.

According to the United Nations Conference on Trade and Development, 2024 will be a record year for global trade – 3.3% higher on the year to US$ 33 trillion – and this despite a rocky and slowing global economy. The main driver behind the improving results is trade services, with a 7.0% annual rise, (accounting for 7.0% of the increase), whilst there was only a 2.0% rise in goods trade. Q3 imports from developing nations dipped 1.0%, with the same result seen in South-South trade – trade between developing countries. Meanwhile, advanced economies led the global growth, with a 3% rise in imports and a 2% increase in exports. There were 14% and 13% rises noted in ICT (information and communications technology) and clothing sectors.

The October euro area seasonally adjusted unemployment rate came in 0.3% lower on the year, at 6.3%, and flat on the month. The EU unemployment rate was at 5.9% in October 2024, flat on the month and 0.2% lower on the year. Eurostat estimates that 12.971 million persons in the EU, of whom 10.841 million in the euro area, were unemployed in October 2024, with unemployment decreasing by 70k in the EU and by 3k in the euro area.

Japan imported 31.80 million barrels of oil from the UAE in October 2024, accounting for 47.8% of its total imports for the month. Total oil imports for the month reached approximately 66.53 million barrels of which 65.06 million barrels, (97.8%), came from Arab countries.

Japan’s October unemployment rate in October rose 0.1% on the month to 2.5%, after three months of reductions, with an increasing number looking to stay in employment after reaching retirement age. Following a dip in September, the total number of people with jobs climbed 0.2%, to a seasonally adjusted 67.98 million, while those without jobs gained 1.8% to 1.71 million. There was a 5.4% hike, to 390k, in the employees who were let go – including those who reached retirement age – whilst the number of people who voluntarily left their jobs decreased 5.4% to 700k. Data saw that there were one hundred and twenty-five jobs available for every one hundred job seekers.

With the greenback riding high, following the ascension of Donald Trump to be the incumbent US president, the Indian rupee sank to a lifetime low yesterday, trading at 84.7050 to the dollar. An added pressure on the rupee was the worry of the country’s slowing economy, (which hit a seven-quarter low of 5.4% in Q3), with a currency trader noting that the decline “has been without much resistance, relatively speaking”, adding that “the price action suggests that either the Reserve Bank of India’s intervention has been comparatively mild or that the underlying dollar demand is too much. Either way, it is a worrying sign (for the rupee).” The RBA is under political pressure to cut rates soonest, but, as its main aim is to get inflation down, it is unlikely to accede to the wishes of others.

Last Friday saw the reappointment of Ngozi Okonjo-Iweala as director-general of the World Trade Organisation, in which could be a difficult period for her, with the new Trump administration threatening hefty tariffs on goods from Mexico, Canada and China. No other candidates ran against her and all of the WTO’s one hundred and sixty-six members agreed by consensus to a proposal to reappoint her. The speed of her reappointment could be down to the fact that it could avoid any risk of it being blocked by Trump, whose teams and allies have criticised both Okonjo-Iweala,, and the WTO, in the past. In 2020, the Trump administration gave its support to a rival candidate and sought to block her first term and was only confirmed when President Joe Biden succeeded Trump in January 2021. However, over the past four years, efforts to revamp the WTO’s dispute settlement system, brought to its knees under Trump due to US opposition to judge appointments, have so far failed to deliver ahead of an end of December deadline; over the next four years, she will also have to deal with mounting tensions between the two superpowers, US and China, continuing trade supply problems and a slowing global economy.

Last week, President-elect Donald Trump threatened the BRICS bloc that “we require a commitment… that they will neither create a new BRICS currency, nor back any other currency to replace the mighty US dollar or, they will face 100% tariffs.” This was in response to discussions, at their recent summit in Kazan, about boosting non-dollar transactions and strengthening local currencies. The group, founded in 2009, comprised Brazil, Russia, India, China and South Africa, with recent new entrants being countries such as Iran, Egypt and the UAE. At the October meeting, there was a joint declaration, encouraging the “strengthening of correspondent banking networks within BRICS and enabling settlements in local currencies in line with BRICS Cross-Border Payments Initiative.”

Last week, President Volodymyr Zelenskiy enacted Ukraine’s first wartime tax increases, (personal tax rising from 1.5% to 5.0%), as the war against Russia enters its thirty-fourth month. The war tax for residents is currently paid on personal income and is being extended to tens of thousands of individual entrepreneurs and small businesses; other taxes will be on some rental payments and raising taxes on the profits of commercial banks and other financial institutions to 50% and 25% respectively. These amendments are expected to reap an extra US$ 3.4 billion for the war battered economy. Although controversial in some quarters, it does seem they were a vital step for Ukraine’s financial programme, with the IMF and the possibility of access to a further US$ 1.1 billion. Next year, the embattled country’s external financing requirements will top US$ 38.4 billion, with a 19.4%, to GDP, budget deficit, down from this year’s 21.0%. The government plans to cover next year’s deficit with financing from the IMF, the EU and also with funds from a long-awaited US$ 50 billion G-7 loan backed by frozen Russian assets.

A new report by the Centre of Inclusive Trade Policy indicates that there has been a 16.0% decline in the shipping of UK food and agricultural products to the EU across the three years since Britain left the single market, attributable to “mind-boggling” bureaucracy on an annual US$ 3.81 billion hit to food exports since Brexit. Although there may be other reasons, such as the war in Ukraine and the COVID pandemic, the report concludes that bilateral trade “demonstrate no recent signs of regaining previous levels”. The main cause of the decline seems to be added layers of regulation, required to send products to Europe since Brexit.

Nationwide posted that UK November house prices were growing far higher than expected, and at the fastest annual rate in nearly two years – 3.7% and 1.2% higher on the year and month. This was just 1% below the all-time highs recorded in the summer of 2022 when lockdown savings were being spent as Covid-19 restrictions were unwinding and borrowing rates were still reasonable.

There was an 0.4% decline in France’s October household consumption, driven by a significant 1.3% reduction in purchases of manufactured goods, a 5.1% decrease in clothing spending and energy consumption also dipping 1.2%. There was also a 0.6% decline in durable goods spending, (following a slight increase of 0.8% the previous month), down to lower purchases of electronic devices, such as computers and phones, as well as a drop in second-hand car sales. An 0.3% decline in energy expenditure in September was quadrupled in October to 1.2%. On an annual basis, household consumption of goods increased by 0.4% in October 2024, compared to the previous year, while food spending dropped by 0.6%. The Q3 economy grew by 0.4%, (double that of the 0.2% increases posted in Q1 and Q2), driven by the positive impact of the Paris 2024 Olympic and Paralympic Games.

It seems that the bain of Brexiteers has finally got his come-uppance. Michel Barnier, the EU’s former Brexit negotiator, has overseen France plunge into a political and economic crisis after a no-confidence vote brought down the government, after only three months – the shortest of any administration of France’s Fifth Republic. This has left the clueless president, Emmanuel Macron, with three problems – how can a budget be decided with France facing a growing public deficit, who can he appoint as prime minister and how long can he himself stay in power? He has ruled out resigning, calling such a scenario “political fiction”, but he has little support remaining, with the left and far right calling for his exit.

Perhaps more worrying for France is its deepening financial crisis. Barnier had tried, (by use of Article 49.3 of the Constitution to bypass debate), to reduce the country’s public deficit from an estimated 1.1% to 5% by 2025. He tried to save about US$ 52 billion because France has high – and rising – public debt, interest rates nudging higher again and soaring energy prices. Even credit agency Moody’s has warned of an escalating political impasse will have a negative impact on the economy. It is estimated thatthere will be a 16.1% hike in bankruptcies to 65k this year, even more layoffs and sluggish economic growth. Other factors point to the trouble facing Macron and his rudderless administration, including a foreign trade deficit touching US$ 106 billion, a rising number of the population, currently at nine million, below the poverty line, an increase in factory closures and a public debt that has risen by 60% in seven years to US$ 33.79 trillion. Europe’s second biggest economy has rapidly become the Sick Man of Europe!