The Increase of Food Stuff Prices and the Danger of Inflation

The increase of food stuff prices does not attract the attention of the expert as the increase of oil prices does for example, despite the tension it causes in the societies and specially in the developed countries and despite the worry for the policy makers who are trying to avoid recession. But the increase of the basic agricultural goods and reaching their highest levels ever during many years might have great impact on the international fiscal policies.
The UN says that the international costs for importing the food stuff might exceed $700 bn in 2007, which is the highest level ever. A research made by the investment bank “UBS” showed that prices of food stuff in the biggest international economies have faced inflation from 1% only in 2005 to about 3% at the beginning of 2007.
Riots have erupted in sporadic areas among them Mauritania, whereas the big increase of the prices of food stuff in Russia might increase inflation to more than 11.5% this year.
Experts warn that the issue of the rapid inflation in food stuff prices and the more rapid increases in oil fuel prices cause implications in analyzing the fiscal policy simply because it might result in the hesitation of the Central Bank before prices of the interest decline.

The European Union Finances Building Stations of Electricity Generating in Palestine

Chairman of the Palestinian Energy Establishment Dr. Omar Katana said that the European Union and European Investment Bank have agreed on financing building for electricity generating stations of high voltage for the first time in the West Bank, adding that these stations will provide the required energy for a period between 15-20 years in the West Bank.

$1 bn, The Volume of Diamond Trading in Dubai in Three Months

The total volume of Diamond trading in Dubai has risen by $1.08 during the third quarter of this year with an average of 31%, opposite to $828 m during the same period of 2006.

Orascom Company Sells its Share in Hitsheson Company for the International Telecommunications Company

The Egyptian Holding Orascom Telecom Company has made a deal with the aim of selling its remaining shares in Hitsheson International Telecommunications Company in Hong Kong estimated at about 14.2% of the total capital of the company with a total value of $11 per one share for the interest of Hitsheson Wambawa and Uda Limited with averages of 9.2% and 5% respectively.

Tunisia Expects Growth Rate to Reach 6.1%

The Tunisian government expected the growth rate to reach 6.1%, and the average of inflation to reach 3% next year according to the Tunisian news agency. It added that this average of growth rate will be achieved through an increase of 9% of investments and an increase of 6.6% in the volume of exports and the recovery of the agriculture sector.

Syria and Iran Invest Akkas Gas Field

The Iraqi Minister of Oil said that Syria and Iraq are currently investing Akkas gas field west of Iraq. The official Iraqi newspaper “Al-Sabah” quoted the minister as saying that the two sides have started to invest the field and agreed on exporting 50 cubic feet daily for securing the needs of the Syrian market.

Small Indexes

- The prices of the shares enlisted in Amman stock market have risen by the end of the week to 7158 points with an increase of 0.58%.
- The Philippines government said that the average of the annual inflation has risen by 3.2% in November due to the increase of food stuffs prices, services and fuel.
- A newly issued economic study has revealed that the costs of the reconstruction of Iraq till 2010 will reach $187 bn. It estimated the possible domestic financing with a total value of 42% which means that the required share of the foreign investments and loans as well as donations is 58%.

Companies Indexes

- Qatar Telecommunications Company “Qtel” said that its planning to acquire more than $3.7 bn after it bought a Kuwaiti telecommunications company, adding it will finance these acquisitions through selling shares in Qatar or selling bonds in London.
- The Russian Energia Company for Space Technologies has prepared the project of a man-borne journey around Mars without landing to be executed between 2020-2022.
- The American General Motors Company said that it proposed buying a share in the biggest cars company in Russia with the aim of expanding its presents in the Russian market which is witnessing a rapid growth rate.

Exhibitions

- The International Conference of Islamic Banks is due to start its 14th annual session in the Bahraini capital al-Manama today with the participation of about 1000 prominent banking figures from 35 Arab, Islamic and Western countries.
- The activities of the fifth conference of the Gulf share markets organized by Datamatex is due to start next Saturday for two days at Burj al Arab Hotel in Dubai.
- The first exhibition of the Iranian hand-made carpets was opened on Friday in Copenhagen, and in cooperation with the Iranian embassy, the private sector, the cooperative companies producing the Iranian hand-made carpets. The exhibition will last for three days on a total area of 700 square meters on the international exhibition fair grounds in Copenhagen.

Bids

- The giant German airlines Lufthansa confirmed that it was still studying the idea to buy the Italian airlines “Alitalia” which is facing huge problems.
- A banking source said that Abu Dhabi National Energy Company “Taqa” called the banks to offer their suggestions with the aim of granting it a joint insurance facilities which it seeks to have with a total value of $5 bn.

Indicators is a daily economic watch newsletter about the Near East, issued by New Orient News agency in Beirut, Lebanon. It is available on Voltairenet.org in Arabic and English. Also worth a read is Tendencies, the daily Near East political watch newsletter, available in Arabic, English and French languages.