Aswat Asharq Al-Awsat :

Aswat Asharq Al-Awsat : Annual Inflation in Euro Zone Rose to 2.6% in May

A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)
A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)
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Annual Inflation in Euro Zone Rose to 2.6% in May

A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)
A European Union flag flutters outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023 (Reuters)

Annual inflation in the euro zone accelerated in May, as initially expected, driven largely by the cost of services, while economists said the European Central Bank (ECB) will cut its deposit rate twice more this year, in September and December.

Eurozone inflation reached 2.6% in May 2024, up from 2.4% in April. A year ago, the rate was 6.1%, according to Eurostat, the European statistical office.

The rate was in line with the estimate published on May 31, and away from the European Central Bank’s target of 2%.

European Union annual inflation was 2.7% in May 2024, up from 2.6% in April. A year earlier, the rate was 7.1%.

Early this month, the ECB has cut interest rates for the first time in almost five years, saying its inflation forecasts had improved.

Luis de Guindos, Vice-President of the ECB, said on Tuesday that the best time to make rate decisions was coinciding with the release of the bank's updated macroeconomic projections, the next of which is slated for September.

“Those are the most significant and interesting moments from the point of view of monetary policy, because our projections are a very important indicator when it comes to decide the evolution of interest rates,” he told Spanish state broadcaster TVE.

According to a significant majority of economists polled by Reuters, the ECB will cut its deposit rate twice more this year, in September and December. They said the risks were skewed towards fewer rate cuts than expected.

That outlook was broadly unchanged from a survey conducted before the ECB delivered its widely telegraphed 25 basis point rate cut on June 6.

Improving business activity, strong wage data and still-sticky price pressures have increased uncertainties around the rationale for more cuts.

In an interview with Reuters on Monday, ECB Chief Economist Philip Lane said there was no “acute urgency” to lower interest rates if the economy continues to expand.

Still, a strong near-80% majority in the June 12-18 Reuters poll, 64 of 81, expected the ECB to cut twice more this year, in September and December, taking the deposit rate to 3.25%.

That was up from nearly two-thirds in May and just about half in an April survey. While 11 expected just one more reduction this year, six predicted three additional cuts.

Financial markets, which until recently were priced for one more cut this year, have started pricing in two reductions just in the past few days, in part related to turmoil in French bond markets following President Emmanuel Macron's decision to call snap parliamentary elections starting later this month.



Aswat Asharq Al-Awsat : Saudi Energy and Economy Ministries Launch Carbon Capture, Utilization Challenge with UpLink

The Saudi flag. Aswat Asharq Al-Awsatt
The Saudi flag. Aswat Asharq Al-Awsatt
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Saudi Energy and Economy Ministries Launch Carbon Capture, Utilization Challenge with UpLink

The Saudi flag. Aswat Asharq Al-Awsatt
The Saudi flag. Aswat Asharq Al-Awsatt

Saudi Arabia's Ministry of Economy and Planning (MEP) and Ministry of Energy (MoEnergy), in collaboration with UpLink, have launched the Carbon Capture and Utilization Challenge which seeks innovative solutions that accelerate the circular carbon economy.

The challenge was launched during the United Nations High-Level Political Forum on Sustainable Development (HLPF) in a main session titled ‘SDG 13 and Interlinkages with Other SDGs – Climate Action’ held on July 10.

The challenge encourages startups to submit distinct solutions that drive carbon reductions through sustainable systems transformation, including carbon capture technologies, novel carbon utilization applications, and industrial integration.

The initiative emphasizes the importance of carbon capture and utilization (CCU), highlighting the crucial role innovation plays in driving a sustainable and economically prosperous future and the important role of carbon removal in reaching net-zero goals by mid-century.

“The climate change issue and sustainability is a global issue,” Saudi Minister of Energy Prince Abdulaziz bin Salman said. “It cannot be attended to in regional scopes or as a smaller territorial thing. It has to be global.”

He stated that the Kingdom seeks to enhance its efforts to achieve its ambitious goal of reaching net zero by 2060 through the Circular Carbon Economy Framework, which not only reduces the impact of carbon emissions, but also values carbon as a resource with real economic value, rather than pollutant.

He also indicated that the Kingdom, in line with this vision, and in order to exploit the economic value of carbon worldwide, has launched, in partnership with leading organizations, a global carbon capture and utilization challenge.

The Minister stressed that Saudi Arabia, by adopting such challenge, is leading influential changes in efforts to confront climate change, as this challenge represents an opportunity for individuals and organizations to transform tomorrow’s challenges into today’s solutions, through joint efforts and pioneering innovations.

Saudi Minister of Economy and Planning Faisal Alibrahim said: “The Kingdom is keen on a just, orderly, and pragmatic energy transition and is working towards the advancement of the circular carbon economy framework.”

“Through this challenge, related to innovation inside the circular carbon economy, we look forward to seeing new solutions that would help push innovation forward,” he said.

He encouraged all innovators and companies to come up with “out-of-the-box solutions.”

Submissions will be evaluated on factors such as scalability, commercial viability, technological readiness, and fundraising success.

Winners will be recognized as top innovators and form part of the UpLink Innovation Ecosystem, a curated program for founders, CEOs, executive directors, and other leaders. They will also share a cash award of up to CHF 300,000 and receive technical, business, and operational support to scale their ideas.