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IMF raises Saudi Arabia’s GDP growth forecast for 2025 to 4% due to rising oil production
The International Monetary Fund (IMF) upgraded its economic growth forecasts for Saudi Arabia in 2025 on Tuesday, due to an earlier than expected unwinding of production cuts. The IMF's latest World Economic Outlook raised its forecast of Saudi Arabia's growth to 4% in 2025 from the 3% projected in April. The growth rate for 2026 has also been revised up to 4%. The IMF stated that the IMF expected the growth of the Middle East and Central Asia to be boosted by the acceleration of growth in oil and gas exporters in the Gulf States, as the effects of disruptions in oil production and shipping and the impact of ongoing conflict dissipated. The regional GDP is now projected to grow by 3.5% in 2025. This compares with the 3% predicted in April and an increase of 2.6% from last year. In 2026, GDP is expected to grow by 3.8%. The IMF stated that "this reflects largely the developments in Gulf Cooperation Council (GCC) countries, notably Saudi Arabia where the unwinding in oil production was faster than anticipated, and Egypt where the outcome in the first half 2025 was better. Saudi Arabia is the top crude oil exporter in the world. It has a massive economic transformation plan called Vision 2030. The goal of the plan is to diversify the revenue sources and move away from hydrocarbons, while increasing non-oil growth. The country is investing heavily in tourism, manufacturing and advanced technology. Voluntary oil production cuts, combined with lower oil prices, have resulted in a decline in revenues and a widening of fiscal deficits. Some projects have also been scaled back. In a statement on the pre-budget last month, the Finance Ministry said that non-oil growth outperformed the overall real GDP growth in the first half 2025 of 3.6%. Non-oil growth was up 4.8% during the same period and contributed over 55% of the total GDP. (Reporting and editing by Rachna uppal)
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GM will take a $1.6 billion charge when tax credits are blown, muddying EV plans
General Motors announced on Tuesday that it will take a $1.6billion charge in the third-quarter as it reshapes the electric vehicle strategy after the federal incentive was scrapped, which is expected to reduce demand. GM's disclosure was one of the most clear indications that U.S. carmakers are scrambling in order to adjust their production plans to respond to a slowing EV market. Auto executives have warned of a sudden drop in battery car sales, which will eventually rebound, after the Trump Administration scrapped a federal tax credit of $7,500 for electric vehicles. The adoption rate of EVs is expected to slow down. In a filing GM stated that it expects the "adoption rate of EVs" to slow down following recent policy changes. These include the termination of some consumer tax incentives, and a softer approach on emissions rules. In a press release, GM said that the charge was a "special item" because it expected EV volumes to be lower than anticipated due to market conditions and a changed regulatory and policy climate. The automakers are also trying to mitigate the impact of President Donald Trump’s tariffs. These forced GM, for example, to suffer a $1.1billion hit. previous quarter The company estimated that trade headwinds would have a negative impact on its bottom line of between $4 and $5 billion in this year. It said it could offset the blow by at least 30%. In premarket trading, shares of the Detroit-based automaker fell 2.5%. The stock has risen by about 4.5% this year. Garrett Nelson, a CFRA Research senior equity analyst, said that the charge is not surprising given the recent market development and the fact that GM has made the most aggressive EV push among traditional automakers. We believe that the U.S. market will benefit from automakers like Toyota and Honda who have invested more in hybrid vehicle technology. GM and Ford, its crosstown competitor, had both launched a program which would have allowed dealers the opportunity to offer a $7.500 tax credit for EV leases once the federal subsidy ended, but then backed out of those plans. The automaker warned that it could impose additional charges after reassessing its manufacturing footprint and capacity. GM's existing portfolio of Chevrolet, GMC, and Cadillac EVs will not be affected by the changes. Charges include a $1.2 billion non-cash impairment tied to EV capacity adjustments and $400 million for contract-cancellation fees and commercial settlements. The charges will be included in the non-GAAP third quarter results, which are scheduled to be released early next week. Reporting by Utkarsh Shitti and Shivansh Twary from Bengaluru, Editing by Tasim Zaid
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The Pakistan Finance Minister sees a staff agreement on the $1.2 billion IMF payment this week
The Pakistani finance minister announced that the country is set to sign an agreement on the review of its loan program with the International Monetary Fund in the coming week. This will pave the path for a further $1.24 billion payment from the lender. The IMF delegation left Pakistan last weekend without signing the so-called staff-level agreement for the second review of its $7 billion Extended Fund Facility and first one for the $1.4 billion Resilience and Sustainability Facility, which was agreed upon in 2024 as a way to stabilize the economy following a severe financial crises. Muhammad Aurangzeb said in an interview conducted on the sidelines the IMF World Bank Annual Meeting that the mission had been on the ground for two weeks. We had a very constructive discussion with them about the quantitative benchmarks and the structural benchmarks. And we have also been having follow-up conversations. We hope to complete the SLA this week. The IMF's lending programme requires that countries undergo regular reviews. Once approved by the Fund executive board, the next tranche will be paid. The IMF program agreed in September 2024 helped stabilize Pakistan's then cash-strapped $370 billion economy, which was engulfed by an economic crisis. Inflation had reached record highs and the currency was rapidly depreciating. Aurangzeb predicted that the government would issue a green Panda Bond - the first bond denominated by Chinese yuan in Pakistan - before the end of the year and return to the international markets with a bond sales of at least one billion dollars next year, although details had yet to be determined. He said: "We're keeping all our options open, whether it is dollar, euro, Sukuk or Islam Sukuk." After disappointing results in last year's fiscal year, the privatisation drive - part of the long-delayed sales of state assets as part of an economic reform agenda and fiscal stabilisation - was expected gain momentum this year. He said, "This is a very important part of our economic road map." Pakistan has also made progress in the sale of Pakistan International Airlines, a national airline and three power distribution companies. Aurangzeb stated that he was "quite hopeful" about the prospects of qualified bidders to bid for PIA, citing lucrative routes into Europe and Britain, which "made it a very good proposition for investors." This would be the first major privatization for about 20 years. The government's previous attempt to privatize the country last year failed after only one lowball bid was received. However, five business groups have expressed interest in the deal, including Airblue and Lucky Cement as well as investment firm Arif Habib, and military-backed Fauji Fertilizer. The final bids will be announced later this year. (Reporting and editing by Sharon Singleton: Karin Strohecker)
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Titan Mining will produce graphite at its New York facility
Titan Mining announced on Tuesday that it would begin producing graphite at its Empire State Mines, located in New York. This comes just days after China increased export restrictions on rare earth minerals. The Canadian miner is targeting ramp-up to a 40,000-tonne-per-year commercial graphite facility, which the company said would be capable of supplying about half of current U.S. natural graphite demand. Titan CEO Rita Adiani said, "China's move to restrict graphite exports highlights the importance of having an adequate supply of natural graphite at home." China had already tightened its controls on rare earth exports. But last week, it added five more elements to the list, making the total of 12 elements that are restricted. It also restricted the export of dozens pieces of equipment and materials used to mine and refine the rare earths - processes that it leads the world in. In March, U.S. president Donald Trump invoked his emergency powers in order to increase domestic production of critical mineral such as cobalt and lithium. Titan says the new facility will produce high-purity natural flake graphite derived from its Kilbourne deposit. (Reporting and editing by Sahal Muhammad in Bengaluru, Katha Kalia from Bengaluru)
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Polish defense industry could help JSW coal miner, says PM Tusk
The Polish Prime Minister Donald Tusk stated on Tuesday that Poland's defence sector may play a part in restructuring the state-controlled coal firm JSW, which is struggling. Tusk stated that his government will soon present a new plan for JSW. The European Union’s largest coking coal producer, used in the production of steel, is preparing a restructuring plan which may include wage cuts. This will help to deal with rising energy prices, falling coal costs and low-cost imports of steel. Tusk said at a press briefing that "we will do everything we can to transform JSW, and save this company or at least an important part of it." "This plan includes co-financing of voluntary redundancies." Poland has invested heavily in its military and defence industry since the Russian invasion of Ukraine's neighbour in February 2022. Tusk stated that JSW could benefit from these efforts, as the region of south-western Silesia is traditionally dominated by mining, steelmaking, and heavy machinery production. He said: "I don't rule out the possibility that the Polish Armaments Group, the Polish Defence Industry, will be able, in this case, to play a role, even in the case JSW, if only in part, in its activities." (Reporting by Anna Wlodarczak-Semczuk, Pawel Florkiewicz and Marek Strzelecki; Editing by Tomasz Janowski)
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Eversource charges record $75 Million Charge for Offshore Wind Sale Settlement
Eversource Energy, a utility firm, said Tuesday that it expects to incur a charge of $75 million after tax or 20 cents per common share in the third quarter as a result of an increased liability for two wind projects sold by Global Infrastructure Partners (GIP). Eversource sold to GIP its South Fork and Revolution Wind project stakes in 2024. The proceeds were $745 million (down from $1.12 Billion) due to lower capital expenditure and the delayed commercial operation of Revolution Wind. The company said it had increased its payments to GIP, by approximately $285 million. This was due to revised estimates of construction costs, including higher insurance costs, tariff impacts and turbine vessel damages, as well as costs related to a temporary work stop order issued by Bureau of Ocean Energy Management. The company said that it also expects to offset some of the impact by an estimated $210 millions federal tax benefit related to tax losses on offshore wind investments. The company said that it will also be reducing its forecast for the full year adjusted profit to $4.72 to $4.80 per shares from an earlier forecast of $4.67 - $4.82. (Reporting from Tanay Dhumal, Bengaluru. Editing by Vijay Kishore.)
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Madagascar's President dissolves National Assembly amid escalating crises
Andry Rajoelina, Madagascar's president, announced on Tuesday that he had disbanded the lower house. This accelerated a standoff between youth-led demonstrators and the military which forced him to leave the island. According to a decree posted on Facebook by the presidency, the 51-year old Rajoelina consulted the leaders of both the National Assembly as well as the Senate's upper house. However, the legality was not clear. Rajoelina, in a defiant speech delivered from an unnamed location Monday evening, refused to step aside despite the protests of Gen Z demanding his resignation as well as widespread defections within the army. Rajoelina claimed that he was forced to leave the country because of threats against his life. A foreign diplomat, an opposition official and a military source all confirmed that he fled the country Sunday on a French military aircraft. In a separate posting on X Rajoelina stated that the decision to dissolve Madagascar's national assembly was "necessary" to restore order in Madagascar. This would pave way for new local elections to take place in the next 60 days. "The people need to be heard again." He said, "It's time to listen to the youth." The leader of the National Assembly's opposition has disputed the decree. Siteny Randrianasoloniaiko is the vice president of the National Assembly and said that the decree was not valid. DEMOSTRATIONS ELEVATING THE TEMPEL The opposition is trying to collect enough signatures in order to impeach Rajoelina, who commands a majority within the parliament. On September 25, protests erupted across the country over water and electricity shortages. They quickly grew into a general uprising against corruption, poor governance, and a lack basic services. This anger was similar to recent protests in Nepal and Morocco against ruling elites. The anger was similar to recent protests against ruling elites in Nepal and Morocco. Many people were waving Malagasy and Gen Z protest banners, which are skulls and crossbones that originated from the Japanese anime "One Piece". French President Emmanuel Macron stated on Tuesday that the constitutional order must remain and that France understands the grievances expressed by the youth but should not exploit them. Rajoelina appears increasingly isolated since losing the support from CAPSAT, a unit of elites who had helped him seize power during a 2009 coup. CAPSAT joined protesters at the weekend and said it would not fire on them. It escorted thousands of demonstrators to the Antananarivo main square. Later, it announced that it would take control of the military. A new army chief was appointed. Rajoelina warned on Sunday about an attempted coup. Since then, the paramilitary police and gendarmerie have broken ranks with President. Madagascar has an estimated 30 million people, of which three quarters live in poverty. According to the World Bank, the GDP per person has dropped by 45% since independence in 1960. Reporting by Lovasoa Rabary and Tim Cocks from Antananarivo, and Giulia Paraavicini from Nairobi; Writing and editing by Andrew Cawthorne
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The oil executives expect a rebalancing of the market from surplus to deficit in the medium term
A range of oil executives in London said this week that the global oil market would tighten on a medium-to-longer term. They remained optimistic despite an immediate glut caused by increased production. The executives stated that the production decline rates could increase as oil prices drop, helping to rebalance a market where demand will be supported in the long-term by the rising consumption of emerging economies. In its monthly oil report, published on Tuesday, the International Energy Agency said that the global oil surplus would reach 3.6 millions barrels per day by the end of the fourth quarter. This compares to a 1.9million bpd daily average for the first three months of this year. The rising production of both OPEC+ and non-members, as well as the Organization of Petroleum Exporting Countries (OPEC+), has held oil prices in check this year. Brent futures traded at around $62 per barrel on Tuesday, down $15 from the same day last. TIGHTNESS MEDIUM-TERM Patrick Pouyanne, CEO of TotalEnergies, said that oil production by producers outside OPEC would start to fall if the price of crude drops to $60 per barrel. Pouyanne, speaking at the Energy Intelligence Forum in London, said that the short-term market was a bit bearish, but the medium-term outlook is quite positive. He cited the decline in production rates and the fact that global oil demand has not peaked. ExxonMobil's CEO Darren Woods said on Monday, at the same conference that if investment is not made in unconventional oil fields and gas, decline rates may reach 15% per annum. He also stated that he believes that oversupply would be a short-term problem. Amin Nasser, Saudi Aramco's CEO, said on Monday that the company sees a resilient demand and a pressing need to invest in long-term supply. ConocoPhillips CEO Ryan Lance stated that the key question for companies such as mine is where will the conventional oil come from in order to meet the growing demand, given the plateauing or peaking of U.S. unconventional supplies. Lance said that oil prices may recover to $75-$80 a barrel in mid-cycle, since supply must be increased to meet demand.
Investors shun risk as stocks plummet and gold soars
As investors became uneasy about the mounting tensions between China and the U.S., they sold global shares, while bonds and gold rose. This was due to the growing anxiety over the upcoming trade talks between China and the U.S. The markets had earlier reacted to Monday's positive cash session, after U.S. Treasury secretary Scott Bessent stated that President Donald Trump is still on track to meet Chinese Leader Xi Jinping for a two day summit in South Korea starting October 31. In an interview with the Financial Times, he accused Beijing in particular of trying to harm the global economy. The U.S. will be charging port fees to ocean shipping companies that transport everything from toys and crude oil.
"ESCALATE TO de-ESCALATE"
Marc Velan said that both Washington and Beijing were posturing ahead of the November summit – escalate to deescalate. "Neither side can afford a war of words as we head into the U.S. midterms."
The European stock markets, which hit record highs earlier this month, are down by 0.7%. This echoes the weakness on Asian markets where technology stocks were hit hard.
Futures for the S&P 500 sank by 1%. This suggests that the rally of Monday may not repeat itself, but also indicates that a complete reversal is unlikely.
Investec's chief economist Philip Shaw stated that "if one looks at recent history, it can be interpreted more as a path to negotiation than a new outbreak of hostilities between the U.S.
"Yes, there's uncertainty. But you've seen a big rally not only in U.S. indices, but also a lot of other global indices." While there are some questions about the U.S. China trade friction, I would interpret this latest sell-off more as a slight correction than an increase in investor uncertainty.
Wall Street's major indexes ended up as much as 2,2% higher on Monday. Chipmakers led the way, as Trump struck a more accommodative tone regarding trade tensions with China. This reversed some of Friday's panic when Trump announced 100% tariffs against China.
Market risk barometers flash red Reflecting increased investor anxiety, gold reversed overnight loss and rose 0.7%, to $4,140 per ounce. This was just short of the new record set on Tuesday of $4,179.48. Bitcoin, which is more likely to follow other risky assets, dropped 3.5% to $111 793. The dollar has gained an advantage over other currencies, including the Australian and British dollars, which have fallen by 0.5% or 0.9% against the greenback.
The yen has historically been a safe-haven currency. It gained 0.1% against the dollar to reach 152.04 after Japan's Finance Minister said that the country needed a new strategy to deal with inflation, rather than deflation. The yield of the 10-year Treasury Bond in the United States was 4.02%. This is a 3 basis point decrease. The U.S. Bond Market was closed Monday due to a public holiday.
The yield on two-year bonds, which is more sensitive to changes in expectations of U.S. interest rate, was down 4.6 basis points at 3.48%. They had fallen 12 basis points since Friday. This marked their biggest two-day drop since early August.
Analysts at Danske Bank stated that any escalation of the trade war will only increase the likelihood that the Federal Reserve will front-load planned rate reductions. The Fed is expected to reduce rates in the coming months and even into next year, to combat a slowing labour market. The euro fell 0.1% to $1.1554 on Monday after French President Emmanuel Macron refused to resign, despite two motions of no confidence being brought against his government. Brent crude dropped 1.7% to $62.63 a barrel following an OPEC report that showed the world's oil supply and demand are expected to be in line next year. This is a change from last month, when a shortage was predicted.
(source: Reuters)