Cool For The Summer!                                                                 30 May 2025

Full marks to Fitch Ratings, probably the first entity to come out to say that Dubai’s red-hot property market is poised for a moderate correction, at no more than 15%, starting in H2. The agency noted that it is not expected to destabilise the market or impact the credit ratings of UAE banks and homebuilders. This blog has noted in the past that, ‘it is all but inevitable that this almost five-year bull run will eventually come to a soft landing, as some major global economic event(s) hit(s) consumer/investor confidence’. However, at the end of last year, there was a definite shortage of inventory and if the current population growth trend, (5.28%) continues, Dubai will be home to 4.068 million by year end – an increase of 204k; by today, 30 May, the population was 3.949 million, having started the year on 3.864 million, an 85k increase. This blog uses a 19:81, villa:apartment ratio and a 5.3:4.1, villa:apartment occupancy. This would indicate that they would need to build 7.3k villas and 40.3k apartments in 2025 to meet the demand from 2025 new residents. It seems obvious that supply is still well short of demand, and it could be a further two years before some equilibrium comes to play. In the four-year period to 2023, new units handed over were 41k a year; the best 2024 guesstimate is 47k. It will be interesting to see what the figure will be this year, with numbers from 44k to 81k being bandied around.

Claiming they had breached regulations for tourist accommodation, the Spanish government has called for the removal of listings of nearly 66k properties on rental platform Airbnb. The announcement followed a Madrid court ruling that Airbnb must immediately withdraw from the market 5k of the properties cited by the ministry. The properties are in six regions – Madrid, Andalusia, Catalonia, Valencia, the Basque Country and the Balearic Islands. It seems that the country is awash with protests against over-tourism, with the latest demonstrations in the Canary Islands last Sunday that attracted thousands of people.  Housing has emerged as Spain’s biggest concern in recent months, due to spiralling rental costs, particularly in larger towns and cities, with tourist apartments having been identified by many as the major cause of the problem. The cost of an average rental has doubled over the last decade, while salaries have failed to keep up. Tourist numbers have risen sharply, post Covid, so much so that Spain, with 2024 tourist numbers 13% higher, to ninety-four million foreign visitors, is the world’s second most popular tourist destination after France. Socialist Prime Minister Pedro Sánchez said earlier this year, “there are too many Airbnbs and not enough homes”, and he promised to prevent the “uncontrolled” expansion of the use of properties for tourism. Barcelona City Hall has said it will eliminate its 10k short-term tourist apartments  by the end of 2028, whilst Airbnb has reached agreements with local authorities in the Canary Islands, Ibiza and Murcia, aimed at ensuring property owners comply with tourist rental rules to tackle a housing shortage in areas such as Madrid and Barcelona. In a bid to tackle the problem, the government is planning to charge non-EU residents a 100% tax when they buy homes in the country.

Spain is not the only European country to face housing shortages and backlashes against Airbnb. In Greece, the government has banned thousands of properties from short-term platforms. To try and improve the country’s dire housing shortage and spiralling rents, it has introduced sweeping changes in legislation which have had a negative impact on short-term rentals. Italy faces the same problems more so because this year sees 2025 Jubilee celebrations in Rome and Vatican City, which will boost visitor numbers by up to fifteen million. The government has reacted to overtourism, safety concerns, soaring rents for residents and increasing shortages of available properties by tightening up on short-term letting platforms. In Portugal, the government is facing a housing crisis and is addressing the shortage of affordable long-term rentals by restricting short-term rentals. This crisis of overtourism and housing shortages can be seen all over Europe and the continent’s problems can only be good news for Dubai’s holiday rental sector, as well as having an impact on the emirate’s residential market.

Another large project for developer MAG sees it joining up with one of China’s biggest engineering companies – Citic Ltd – to build ‘Keturah Ardh’, within the Al Rowaiyah First District in Dubailand. The US$ 6.0 billion project, encompassing 18.47 million sq ft, will have plot sizes ranging from 50k to 200k sq ft; it will also feature over 100k trees, ‘aged between twenty and two thousand, two hundred years’. The first phase, under the Keturah Ardh Couture Art brand, will launch in Q4, followed by phase 2 in Q1 2026, with subsequent phases being rolled out through to 2027; the timeframe is within a two- to seven-year period.

Meanwhile, Binghatti has invested over US$ 6.81 billion in Nad Al Sheba 1, better known as the original Nad Al Sheba Racecourse, the former venue of the iconic Dubai World Cup. The land will be utilised for eight million sq ft of gross floor area, “to be used for what would be the company’s first large-scale master-planned residential community in the emirate”. In Dubai, the developer has around 20k units under development, across about thirty projects, including Downtown and Business Bay, and including branded residences in collaboration with Bugatti, Mercedes-Benz, and Jacob & Co. Its clients include Neymar Junior and Andrea Bocelli.

Following January’s Dubai Land Department’s announcement of private property ownership in Sheikh Zayed Road from the World Trade Centre Roundabout to the Water Canal and Al Jaddaf area, the first freehold residential and commercial project on SZR has been launched; at the time, three hundred and twenty-nine plots in Al Jadaf and one hundred and twenty-eight in SZR were in the list. This week, the first freehold residential and commercial project on SZR has been launched – the sixty-storey AA Tower encompassing 10k sq mt and comprising three hundred and sixty-nine residential units, including one hundred and ninety-five one-bedroom apartments, one hundred and ninety-eight two-bedroom apartments, and only three three-bedroom apartments, along with twenty-six office units and five retail stores. Prices for residential apartments, (which can be bought with a 28% downpayment and twelve 6.0% quarterly repayments), range from US$ 800k to US$ 1.47 million – an average of approximately US$ 967 to US$ 1,247 per sq ft – with office spaces between US$ 608k and US$ 1.91 million. Retail stores start at US$ 3.31 million and go up to US$ 6.81 million.

Emaar is investing US$ 812 million to acquire land in Ras Al Khor, from Dubai-listed Amlak Property Investment which is divesting itself of its non-core operations. In 2022, the developer acquired the Dubai Creek Harbour development in its entirety, from Dubai Holding. The cash-and-share deal then was valued at just under US$ 2.0 billion. By the end ofQ1, Emaar Properties’ revenue backlog increased by 62% on the year to US$ 34.60 billion. A company statement noted that “acquiring this land will enable the company to expand its land bank portfolio and initiate new real estate projects aligning with its core business”.

Real estate transactions across five of the seven emirates in the UAE surged to over US$ 65 billion in Q1, driven by robust investor confidence, proactive government policies and enhanced demand from within and outside the nation. There is no doubt that the UAE has become one of the world’s most attractive destinations for living, working, and investing in

		US$ bn	%	Number k	%
	Dubai	52.59	16.20	58.04	31.50
	Abu Dhabi	6.89	26.70	6.90	49.00
	Sharjah	3.60	31.90	24.60
	Ajman	1.51	29.00	3.63
	RAK	0.65		1.30
		65.24		94.47

BEYOND Developments has announced a partnership with UK’s Ascot Racecourse, which sees the Dubai-based firm becoming the Official Real Estate Partner of Ascot and Royal Ascot across all twenty-six race days this year, including the globally renowned Royal Ascot in June; this five-day racing spectacular, which attracts 300k racegoers, and takes place between 17 – 21 June. It will be great PR for the Dubai real estate industry.

Latest data from the World Travel & Tourism Council expects 2025 international visitor spend, to be 3.96% higher, to US$ 72.89 billion, as well accounting for 13% of the UAE’s GDP. Furthermore, 925k jobs will be supported by the sector – equating to about 12.5% of the nation’s workforce; and a 3.9% rise on the year. Equally robust is domestic tourism, with visitor spend expected to be over US$ 16.3 billion – 47% higher than pre-pandemic 2019 returns. Both segments – international and domestic – have benefitted from government initiatives, (like the Tourism Strategy 2031), including smart city development, sustainable tourism projects, and world-class infrastructure.

Last year, Dubai, the nation’s tourism lynchpin, welcomed 18.72 million international visitors in 2024 – up 9.2% on the year, with Q1 figures coming in at 5.31 million, 3.0% higher on the year. The city’s appeal lies in its ability to blend luxury, accessibility, and innovation, supported by a hotel inventory of 154.0k rooms in 2024 – the largest globally. By the end of the year, a further 3.0k will be added, including high-profile names, such as One & Only One Za’abeel and Jumeirah Marsa Al Arab. Of that total, 70% of new developments will cater to luxury and serviced apartment segments, aligning with Dubai’s focus on attracting high-net-worth individuals and remote workers through programs like its virtual working initiative.

This week, the MICHELIN Guide Dubai 2025 was unveiled at an event at the Address Sky View hotel. The fourth edition featured one hundred and nineteen establishments, across more than thirty-five cuisine types, and this year sees two restaurants becoming the first in Dubai to receive Three MICHELIN Stars. They were FZN by Björn Frantzén, (its Swedish chef), and Trèsind Studio which became the first Indian restaurant in the world to be awarded such an accolade. Two new eateries were awarded One MICHELIN Star for the first time – Jamavar’s Dubai outpost, located in the Opera district, and Manāo, led by Dubai-born chef Abhiraj Khatwani. There are now fourteen restaurants in Dubai, holding One MICHELIN Star.

Reports indicate that a total of 961.9k pilgrims have arrived in Saudi Arabia, for the annual Hajj pilgrimage, with 912.6k entering by air, 45.0k by land and 4.3k by sea. Emirates is adding thirty-three Haji season special flights to Jeddah and Madinah running until 31 May, and again between 10 – 16 June, to support thousands of pilgrims embarking on their once-in-a-lifetime journey to the holy city of Makkah. In addition, EK will operate thirteen more flights to and from regional destinations including Amman, Dammam, Kuwait, and Bahrain to meet high travel demand during the Eid Al Adha period. During this time, the airline will transport nearly 32k Hajj passengers from key cities across its network, including the USA, Pakistan, Indonesia, South Africa, Thailand and Côte d’Ivoire.

The Presidential Court in UAE has announced that next Wednesday, 28 June, will be the first day of Dhu Al Hijjah for the Hijri year 1446. Consequently, Thursday, Day of Arafat, and Friday, 06 June 2025, corresponding to 10 Dhu Al Hijjah, the first day of Eid Al Adha, will be public holidays.

Discussions are ongoing between the UAE and the EU about setting up a Comprehensive Economic Partnership Agreement. As with the current thirty or so deals, already signed, this will deepen trade ties and open opportunities for investment and innovation and, at the same time, remove trade barriers, enhance market access for goods and services, and create investment in priority sectors. Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, emphasised that an EU CEPA “represents an extraordinary opportunity… to enhance trade and investment ties that will foster greater collaboration and create mutual benefits and prosperity”, with the EU Commissioner for Trade and Economic Security, Maroš Šefčovič, adding “by working together, we will strengthen our supply chains, drive innovation, and create jobs that will benefit our communities and economies for many years to come.” Last year, the EU saw its trade with the UAE jump 3.6% to 8.3%, topping US$ 67.6 billion, those numbers will be ‘knocked out of the park’, if a CEPA went head, especially with a possible US$ 50 billion AI data centre, (in collaboration with France), and a US$ 40 billion investment in Italy’s energy and defence sectors.

A week ago, an unnamed exchange house was fined over US$ 54 million for non-compliance with the provisions of Article 137 of the Decretal Federal Law No 14 of 2018. This week, the Central Bank of the UAE has imposed a total of US$ 5 million in financial penalties, (one for US$ 3 million and the other US$ 2 million), on two unnamed UAE branches of foreign banks for violations related to anti-money laundering and counter-terrorism financing regulations. According to the CBUAE, the penalties follow examinations that revealed the two branches failed to comply with the UAE’s AML legal framework and related regulatory requirements. It was a busy week as yesterday, another unnamed exchange house was fined over US$ 27 million for significant failures in the company’s regulatory framework.

The countdown to Dubai Summer Surprises 2025 has officially begun, with this year’s edition running for sixty-six days from 27 June to 31 August. For the first time, the city’s retail calendar will be split into three themed shopping windows:

• Summer Holiday Offers                      27 June – 17 July
• Great Dubai Summer Sale                  18 July – 10 August
• Back to School                                    11 – 31 August

Each phase will feature exclusive promotions, mall activations, raffle draws, and family-friendly events across Dubai’s top shopping destinations.

As part of its ongoing efforts to enhance tax transparency and improve the business environment in the UAE, the Ministry of Finance has announced the issuance of a Cabinet Decision regarding the tax treatment of unincorporated partnerships. Under the Corporate Tax Law, unincorporated partnerships are generally treated as tax transparent entities, meaning the partnership itself is not taxed, but its partners are subject to tax individually on their respective shares of the income. However, this legislation also gives the option for the partners to apply for the partnership to be treated as a taxable person, similar to any other legal entity. Upon approval by the FTA, the unincorporated partnership will be regarded as a legal person and a resident person for tax purposes. This step aims to promote tax neutrality by allowing unincorporated partnerships to benefit from the exemptions and reliefs available to legal persons under the Corporate Tax Law.

In his capacity as Chairman of the Financial Audit Authority, Sheikh Maktoum bin Mohammed, First Deputy Ruler of Dubai, has issued decision No 4 of 2025, relating to the operational procedures for the Central Violations and Grievances Committees, under the Financial Audit Authority in Dubai. The new guidelines apply to senior officials and employees of entities under FAA’s oversight and are designed to ensure fair, transparent, and proportionate disciplinary measures, while safeguarding employee rights. The Decision outlines how violations are handled, grants employees the right to appeal within fifteen working days, and requires all committee proceedings to remain confidential, unless disclosure is authorised by the D/G and serves the public interest. The changes are seen as part of a broader effort to safeguard public finances, maintain high standards of governance, and boost trust in disciplinary and appeals processes within Dubai’s public sector.

An agreement between Mohammed Bin Rashid Space Centre, with US-based Firefly Aerospace, is set to deploy the country’s Rashid 2 Rover, on the far side of the moon, as part of its Lunar Mission. The UAE craft will be placed on Firefly Aerospace’s Blue Ghost lander stacked on the Elytra Dark orbital vehicle. It will join Blue Ghost Mission 2, in 2026, which will be Firefly Aerospace’s second lunar mission, alongside payloads from Australia, the European Space Agency and Nasa. Sheikh Hamdan noted that “the UAE’s mission to explore the far side of the Moon places our nation among a select group of countries advancing the frontiers of lunar exploration”.

A high-level economic delegation from the UAE conducted a trade visit to Côte d’Ivoire. Discussions focused on strengthening bilateral relations, with particular emphasis on advancing economic and trade cooperation. Investment opportunities, across a range of sectors including tourism, renewable energy, and banking and financial services, were explored. The visit culminated in the signing of an MoU to establish a joint business council between the UAE and Côte d’Ivoire.

On an official visit to Oman, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, witnessed an agreement to develop and operate the first phase of the Al Rawdah Special Economic Zone in Oman’s Al Buraimi Governorate. DP World will be the majority partner in this UAE-Oman JV which will be developed by Mahadha Development Company; phase 1 will cover 14 sq km, to be eventually expanded to 25 sq mt. The zone, with links to both Jebel Ali and Sohar ports, will focus on sectors such as logistics, manufacturing, pharmaceuticals and food processing.

At last week’s fifteenth BRICS Trade Ministers’ Meeting, the UAE, represented by Juma Mohammed Al Kait, of International Trade Affairs at the Ministry of Economy, highlighted the country’s commitment to global trade cooperation and economic partnership, whilst noting the UAE’s position as a vital bridge between East and West, and the Global South. The ten-nation bloc discussed key global trade challenges and expressed firm support for a fair, rules-based multilateral trading system and ended by adopting several key documents aimed at enhancing economic cooperation and BRICS’ influence in global trade. (BRICS comprises the five original members – Brazil, Russia, India, China, South Africa – that expanded in 2023, with the addition of Egypt, Ethiopia, Indonesia, Iran, and the UAE, with the acronym BRICS+). The bloc accounts for nearly 40% of the global population and around 25% of worldwide GDP.

Dubai Aerospace Enterprise, a Dubai-based global aviation service, has sold seventy-five aircraft in two transactions – one for around fifty Embraer E_JETS to a specialist aircraft lessor, and the other being approximately twenty-five out-of-production aircraft sold to a financial investor, with DAE providing lease, asset, and technical management services. This is in line with DAE’s aim to streamline its fleet by focusing on newer, more fuel-efficient aircraft, reducing the weighted average age of its passenger fleet while extending the average remaining lease term. When concluded, DAE’s fleet will see its portfolio being 45:42:13 – Boeing, Airbus and ATR – and be valued at over US$ 14.0 billion. According to recent studies, the global aircraft leasing markets is projected to grow by 4.5% annually through 2030.

Wednesday, 28 May, was the first day of trading on the DFM for Dubai Residential Reit, and had risen 13.64%, at the close of trade. The Shariah-compliant income-generating closed-ended real estate investment fund listed at US$ 0.300 per share, opening trading at US$ 0.330, rising to as high as US$ 0.357 before paring gains to close the day at US$ 0.341. It hit a low of US$ 0.327 during the day’s trading. Although it was an impressive opening day, the 13.6% gain is ranked only fifth in ‘first day trading gains’ behind Parkin’s 31.4% surge, Dubai Taxi (18.9%), Al Ansari (16.5%) and DEWA (15.7%).

The DFM opened the week, on Monday 26 May, six hundred and ten points higher, (9.4%), on the previous seven weeks, gained seventeen points (0.3%), to close the trading week on 5,481 points, by Friday 30 May 2025. Emaar Properties, US$ 0.05 higher the previous week, shed US$ 0.11, closing on US$ 3.58 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.73 US$ 6.27 US$ 2.17 and US$ 0.41 and closed on US$ 0.74, US$ 6.10, US$ 2.25 and US$ 0.41. On 30 May, trading was at one million and thirty-one thousand, with a value of US$ ninety-nine million dollars, compared to one hundred and twenty-two million shares, with a value of US$ one hundred and twenty-seven million dollars, on 23 May 2025.

The bourse had opened the year on 4,063 points and, having closed on Friday, 30 May at 5,481 was 1,418 points (34.9%) higher YTD. Emaar had started the year with a 01 January 2025 opening figure of US$ 2.16, and had gained US$ 1.42, to close on 30 May at US$ 3.58. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started 2025 on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed May 2025 at US$ 0.73, US$ 6.27, US$ 2.25 and US$ 0.41.

By Friday, 30 May 2025, Brent, US$ 0.69 lower (1.5%) the previous week, shed US$ 0.74 (1.1%) to close on US$ 63.90. Gold, US$ 174 (5.5%) higher the previous week, shed US$ 71 (2.1%) to end the week’s trading at US$ 3,291 on 30 May.

Brent started the year on US$ 74.81 and shed US$ 10.91 (14.6%), to close 30 May 2025 on US$ 63.90. Gold started the year trading at US$ 2,624, and by the end of May, the yellow metal had gained US$ 667 (25.4%) and was trading at US$ 3,291.

Nvidia reported a huge boost to its revenues in Q1, with sales of its chips rising more than 69% on the year, whilst profits surged to a mega US$ 18.8 billion; shares rose 6.4% on the news. Sales in Nvidia’s key data centre business grew 73% on an annual basis. Profits would have been higher had not Washington restricted the sale of Nvidia’s China-specific “H20” chips, which led to a drop in demand; it incurred a US$ 4.5 billion charge.  But Nvidia’s stock, along with share prices of fellow chipmakers, plummeted in April after US President Donald Trump announced a wave of tariffs and tightened export restrictions. Things change fast in the Trump era, and this week, the company’s chief executive, Jensen Huang, said “global demand for Nvidia’s AI infrastructure is incredibly strong”, and expected demand for AI computing to “accelerate”. However, there are reports that the US president has ordered US chip software suppliers to stop selling their products to Chinese chip companies, so as to curtail that country’s progress in developing their own advanced chips that would compete with the likes of Nvidia. However, it seems that a new market may have opened up – the Middle East, including Saudi Arabia and the UAE.

As M&S begins to return to some form of normalcy, four weeks after being grounded by a cyber-attack, there are reports that Tata Consultancy Services has begun an internal investigation, which should be completed by the end of the month. After being the provider of IT services to the retailer over the past decade, it is looking into whether it was a gateway for the attackers.

Earlier in the year, the mega US packaging maker acquired its UK rival, DS Smith, in a US$ 5.8 billion deal. Months later, there are reports that it plans to close five UK sites, (yet unknown which ones), relocate one site, reduce its twenty-four-hour operations at another site from seven days to five and make a “small headcount reduction” at two other locations. Up to eight hundred jobs are at risk.

Following Ofwat’s “biggest and most complex” investigation, Thames Water has been fined a record US$ 165 million, in relation to its wastewater operations, (US$ 141 million) and dividend payouts, (US$ 24 million). Ofwat confirmed that customers will not be responsible for paying the fine which will be paid by the company and shareholders. The UK’s biggest water provider serves sixteen million customers across London and the SE.

KFC, already with 1k UK outlets, is planning a US$ 2.0 billion, five-year investment to build five hundred new restaurants, (costing some US$ 675 million), focussing in “key locations” such as Ireland and NW England, upgrading existing shops and creating 7k new jobs; it first UK venture, in Preston, opened sixty years ago on 01 May 1965. As US$ 3.78 billion is spent every year on fried chicken, KFC, by far the largest fried chicken chain in the UK, does not want to be caught by the likes of Wingstop, Dave’s Hot Chicken and Popeyes.

After two years of toing and froing, it seems that the Daily Telegraph may have a new owner, with Gerry Cardinale, RedBird Capital’s founder, agreeing to take over control from the investment vehicle RedBird IMI, majority-owned by UAE interests. Initially, RedBird Capital was aiming to purchase the title, but their bid was blocked by the UK government on press freedom grounds. The latest agreement sees Abu Dhabi’s IMI retaining 15% control of the title. There are reports that the Daily Mail owner, Lord Rothermere, may be interested in taking up a stake, just shy of 10%. Even though an agreement has been signed, it appears that Dovid Efune, the UK-born publisher of The New York Sun, could well be in discussions with investors about a deal for the title.

It appears thatthe owners of the AA are planning either to sell the company or list it on the London Stock Exchange; either way, it would probably value the company at US$ 6.09 billion. UK’s biggest breakdown recovery service, with sixteen million customers, is jointly owned by three private equity firms – Towerbrook Capital Partners, Warburg Pincus and Stonepeak. The latter invested US$ 610 million into the company in a combination of common and preferred equity, in a transaction which completed last July. The business, that has recorded four consecutive years of customer, revenue and earnings growth, has no fixed timetable and that a deal might not take place until after 2026. The latest financials show that the AA has US$ 2.57 billion of net debt, which it is gradually paying down, as profitability improves. The firm listed on the London Stock Exchange in 2014 but was taken private nearly seven years later at little more than 15% of its value on flotation.

An investigation by the EU Department of Justice has shown that the Chinese fast-fashion Shein website has been involved in fake discounts, pressure selling, and other illegal practices that have breached the bloc’s legislation. It has been given one month, by EU regulators, to respond to its findings or face fines based on its sales in the EU countries where it says it has breached the law. Such practices include misleading information, deceptive product labels, misleading sustainability claims, and hidden contact details. To add to their problems, the Chinese firm, was also found to have pretended to offer better deals by showing price reductions that were not based on the actual prior prices, and fake deadlines to put consumers under pressure to buy.

This week, the UK government announced that it has rid itself of the last remaining shares and puts an end to the 2008 US$ 61.63 billion government bailout, for Royal Bank of Scotland, (now NatWest Group). It is estimated that the UK taxpayer has lost US$ 10.2 billion on the deal. It will draw a line under one of the most notorious bank bailouts ever orchestrated and comes nearly seventeen years after the then Labour chancellor, Lord Darling, conducted what RBS’s boss at the time, Fred Goodwin, labelled “a drive-by shooting”. A stock exchange filing disclosing that taxpayers’ stake had fallen below 1% was made last week, down from over its over 80% initial stake. Total proceeds from a government trading plan launched in 2021 to drip-feed NatWest stock into the market have so far reached US$ 17.34 billion which will increase to US$ 17.88 billion, once the remaining shares have been sold. On top of that, institutional share sales and direct buybacks have yielded a further US$ 15.58 billion, dividend payments – US$ 6.64 billion – and fees/other payments of US$ 7.58 billion brought the total proceeds, since 2008, to US$ 47.81 billion.

 Two main points driving a sharp fall in the number of vehicles manufactured in the UK, last month, were US tariffs and the timing of Easter. The 59.2k vehicles manufactured in the month was the lowest April output for more than seventy years, except for the Covid April 2020, 16% lower on the year and 25% down on the month. Furthermore, during a period when the industry is slowly moving from petrol vehicles to EVs, production has been impacted. There is some hope that new trade deals with the US, EU and India may help boost upcoming production. Wednesday’s court ban blocking Trump’s tariffs does not apply to the 25% tariff on steel, aluminium, and cars. This was superseded to some extent by a May bilateral US/UK agreement to reduce the tariff, to 10%, on 100k vehicles but this has yet to take effect.

Volvo Cars has announced that it will slash around 3k jobs from its payroll, with the main impact being felt by office-based positions, representing about 15% of its white-collar workforce, in its home base of Gothenburg, Sweden. In April, the carmaker, owned by Chinese group Geely Holding since being divested by Ford in 2010, announced a US$ 1.9 billion “action plan” shake-up of the business facing the triple whammy of Trump’s 25% tariffs on imported cars, higher cost of materials and slower sales in Europe. April witnessed an 11% decline in global sales, compared to a year earlier. Four years ago, it announced that all cars would be electric by 2030 but has doubled down due to a number of issues including “additional uncertainties created by recent tariffs on EVs in various markets”.

Brazil’s Public Labour Prosecutor’s Office (MPT) is to sue BYD, which has had a presence on the country since 2015, and two of its contractors for human trafficking and conditions “analogous to slavery” at a factory construction site in the country. It appears that two hundred and twenty Chinese workers were rescued. The regulator is suing for US$ 46 million in damages from the three parties, after construction of the Chinese electric vehicle’s new plant was halted because workers were found living in cramped accommodation with “minimum comfort and hygiene conditions”, noting that some workers slept on beds without mattresses and one toilet was shared by thirty-one people; many had their passports confiscated and were working under “employment contracts with illegal clauses, exhausting work hours and no weekly rest”. They also had up to 70% of their salaries withheld and faced high costs to terminate their contracts. BYD’s first EV plant outside of Asia was scheduled to be operational by last March.

Japan’s core consumer prices rose, in April, at their highest pace, 3.5%, (and up 0.3% on the month), since January 2023, attributable to reduced government utility subsidies and surging rice prices; this figure has remained over the Bank of Japan’s 2.0% target since April 2022. Core-core CPI, which strips away both energy and fresh food, was 0.1% higher on the month at 3.0%. Meanwhile, energy prices surged 3.3% on the month to 9.3%, as electricity prices jumped 13.5% and for city gas by 4.7%;  food prices, excluding fresh items, rose 0.8% on the month to 7.0%, with rice prices reaching record highs for the seventh consecutive month, up by a massive 98.4%, as persistent supply shortages continue.

Last week’s blog – ‘Beer Drinking Weather’ – noted the rice problem in Japan.

‘Taku Eto’s joke that, as Japan’s farm minister he never had to buy rice because his supporters give him “plenty” of it as gifts, cost him his job and sent Prime Minister Shigeru Ishiba’s minority government into a spin. Japan is facing a major cost of living crisis, as the price of rice has doubled over the past twelve months. Until 1995, the government controlled the amount of rice farmers produced by working closely with agricultural cooperatives, and since then the agriculture ministry has continued to publish demand estimates, so farmers can avoid producing a glut of rice. However, it seems that something went wrong in 2023 and 2024 when the estimated demand of 6.8 million tonnes was 3.5% off the actual 7.05 million tonnes demand rising because of more tourists visiting Japan and a rise in people eating out after the pandemic. The problem was exacerbated as actual production was even lower than the estimate: 6.61 million tonnes. With Japan holding a key national election this summer, Shigeru Ishiba has to do something to placate both parties – the consumer and the farmer’.

Indicating that India may well soon become the world’s third largest economy, it has consolidated its current fourth ranking – behind the US, China and Germany, and ahead of Japan – with its GDP now topping US$ 4.0 trillion. The main drivers appear to be robust private consumption, strategic policy reforms, dynamic private sector, and a favourable geopolitical environment. It is noteworthy that the IMF has posted global growth for this year and 2026, at 2.8% and 3.0%, has been easily surpassed by India’s 6.2% and 6.3%, considered to be the fastest-growing major economy. The IMF’s April 2025 World Economic Outlook report forecasts India’s nominal GDP reaching US$ 4.187 trillion by FY26, slightly edging out Japan’s projected US$ 4.186 trillion. Krishnamurthy V. Subramanian, IMF executive director, has set an ambitious long-term vision, suggesting that India could grow into a US$ 55 trillion economy by 2047, if it sustains an 8.0% annual growth rate in rupee terms.

Profits of China’s major industrial companies, in April, rose by an annualised 1.4% – up from a Q1 0.8% – climbing by 3.0% in the month, compared to April 2024. Industrial firms, with an annual main business revenue of at least US$ 2.78 billion, posted combined profits of US$ 294.27 billion, during the first four months of 2025.

It does seem strange that Richard Boyle has pleaded guilty to four charges in South Australia’s District Court; he had originally been charged with sixty-six offences. In 2017, he blew the whistle on dubious practices at the Australian Taxation Office and was charged of disclosing protected information, making a record of protected information, using a listening device to record private conversations, (without consent), and recording another person’s tax file number. When his complaints were apparently ignored by senior management, in what seems to have been a bureaucratic coverup, he went public to ABC’s ‘Four Corners’, known as the home of Australian investigative journalism. There, he alleged, inter alia, that his area was instructed to use heavy-handed tactics on taxpayers who owed the tax office money. He has been trying to avoid a criminal trial but has, to date, failed in his quest. It is difficult not to agree with former senator Rex Patrick that had said this was a “disgrace”, and that “it just shows that there is injustice in our political system where we persecute people who blow the whistle”, and that this case shows “whistleblower laws are totally inadequate”. Kieran Pender, from the Human Rights Law Centre, noted that “prosecuting whistleblowers has a chilling effect on truth and transparency, and sends a clear message to prospective whistleblowers that if you speak up you will face punishment.”

Three unknown judges, in the Manhattan-based Court of International Trade, have tried to stall Trump’s tariffs, and in the unlikely event of their success it would be a major blow to the President’s economic policies. Claiming that he had overstepped his authority, when he introduced an emergency law to impose global tariffs, they have put temporary skids on Trump’s next steps and have given him ten days to formally withdraw the tariffs. The court ruled that Trump had overstepped his authority by imposing across-the-board duties on imports from nations that sell more to the United States than they buy.  However, this is almost certainly not to occur, with the administration saying that it was “not for unelected judges to decide how to properly address a national emergency”. The White House quickly appealed the decision and could take it to the Supreme Court, if needed. There is no doubt that Trump will not take this lying down and he will find other measures to get his way. Better news for Trump at the end of the week, the Court of Appeals for the Federal Circuit ruled that his tariffs can stay for the time, being while it considers the government’s appeal.

With patience running thin at the dilatory and oft-vacillating tactics of the EU non-elected leaders, Donald Trump threatened to impose a 50% tariff on imports from the European Union. Known for their intransigence and stubbornness, brought to the fore when negotiating with the UK, the US seems to have pulled the pin on the twenty-seven-nation bloc, indicating that since negotiations with the EU “are going nowhere,” there will be “a straight 50% tariff on the European Union, starting on 01 June 1, 2025”. Meanwhile, the EU recently threatened to hit US goods worth nearly US$ 113 billion with tariffs, if the ongoing talks fail to lower levies on European goods. EU Trade Commissioner Maros Sefcovic has commented that it is committed to securing a trade deal with the US “EU-US trade is unmatched and must be guided by mutual respect, not threats. We stand ready to defend our interests”, and that “the EU’s fully engaged, committed to securing a deal that works for both”.The EU is one of the Washington’s largest trading partners, sending more than US$ 600 billion in goods last year and buying US$ 370 billion worth.

After appealing to the good spirits of Donald Trump, by asking for time to “reach a good deal”, the US president backed down on his threat to levy 50% tariffs on the EU. Because of this, as well as his spending and tax-cut bill currently in legislation, the euro hit a one-month high, of US$ 1.142 against the greenback, investors’ mindsets were impacted. Trump announced the decision to put off EU tariffs until 09 July which is the end of the ninety-day pause on Trump’s 02 April 2 “Liberation Day” levies on the EU. If, as it seems, Trump is gung-ho on MAGA, federal government debt is going to explode, which is not good news for those with US$-assets, as the currency will slide lower.

The ongoing war of words between the Trump administration and Harvard University continues unabated, with the Government Services Administration planning to circulate a letter to agencies asking them to identify whether Harvard contracts could be “cancelled or redirected elsewhere”. It is estimated that US$ 100 million worth of contracts, numbering around thirty, could be under review. To date, the government has frozen US$ 2.65 billion in federal grants and has also tried to revoke Harvard’s ability to enrol international students. Harvard commented that its “cutting-edge medical, scientific, and technological research” has historically been “supported by the federal government” and other entities. Funds will not be revoked automatically but will start a review of funds the university receives from the federal government to determine whether that funding is critical in the eyes of the administration. The regulator will consider reallocating those funds elsewhere if it considers that standards have not failed.

Although not best known for its forecasting ability, the IMF sees the UK economy expanding, 0.1%, to 1.2% this year, and more than previously thought, with the now standard caveat of US tariffs will be a problem; it also noted that the economy will “gain momentum next year”. The world body’s three prior 2025 growth numbers for the UK were 1.5% in October 2024, 1.6% (January), and 1.1% (April), with its 2026 prediction remaining at 1.4%. This anticipated lower growth is largely due to tariffs and the uncertainty caused by shifting trade policy in the US, global economic uncertainty and slower activity in UK trading partners. The report also touched on the long-standing problem, (continuing to slow the UK economy), “weak productivity continues to weigh on medium-term growth prospects”. It also acknowledged that, though interest rates “should” continue, the BoE now have a “more complex” job due to the recent rise in inflation and “fragile” growth. It also managed to laud the Starmer administration by adding “fiscal plans strike a good balance between supporting growth and safeguarding fiscal sustainability”.

May has not been the best month for Keir Starmer who, last week, partially U-turned on his decision to limit the winter fuel allowance to means-tested pensioners. Now it seems there is the possibility that Labour that could scrap the two-child benefit cap is “certainly something we’re considering.” Just as he espoused that the winter fuel allowance decision was non-negotiable, he has previously refused to commit to scrapping the cap which came into force eight years ago in 2017.

Job search site Adzuna released figures on Tuesday that indicated that in April, the average advertised wage rose buy almost 9.0% to US$ 57.3k – the steepest increase since June 2022. Only last month, the BoE cut rates by 0.25%, to 4.25%, but the monetary policy committee cautioned about the problems of elevated wage growth., which has been borne out by April’s wage figures. According to the British Retail Consortium, May annual food inflation continued to move higher, for the fourth consecutive month, although overall prices dipped 0.1%. With costs – such as employers’ NI contributions rising, by 1.2% to 15.0%, from April, the National Minimum Wage for those aged above twenty-one to US$ 16.54 per hour and energy bills/council taxes moving higher – it is no wonder that inflation has returned to its upward trend.

It looks as if Dubai, (and the country) is in for a long and hot summer, if current weather patterns continue. Last Saturday, 24 May, Sweihan in Al Ain hit the highest temperature in the country, reaching a scorching 51.6°C, at 1.45pm, the highest ever temperature ever posted in May since records began in 2003, and a possible indicator that summer has started earlier than usual. This follows last month’s record when the country saw its highest ever April temperature at 42.6ºC. Last July, Sweihan recorded a high of 50.8ºC – a temperature that has already been surpassed two months earlier in May.

On paper, the hottest and coldest days of the year should be around the summer and winter solstices on 21 June (the longest day of the year, when Dubai’s sunrise and sunset occurs at 05.29 hrs and 19.12 hrs), and 21 December (the shortest day of the year when Dubai’s sunrise and sunset occurs at 07.01 hrs and 17.34 hrs). Daytime hours on solstice days amount to thirteen hours, forty-three minutes, (summer) and ten hours, thirty-three minutes, (winter). On 21 June, Dubai will experience three hours, ten minutes more daytime than it did on 21 December. What would happen and who would benefit in summer, if the clocks were turned forwards an hour? Obviously, the amount of daytime remains the same, but sunrise would occur at 06.29 hrs and sunset would be an hour later at 20.12 hrs, when the temperatures will be slightly cooler and most would have extra leisure time when it is still light and slightly cooler. That would be Cool For The Summer!