Global debt fell from a record in the second quarter of this year as the era of more than a decade of cheap borrowing costs comes to an end amid the weakening economic outlook and rising interest rates.
Debt levels for the April to June quarter dropped by about $5.5 trillion to $300tn, after rising by more than $2.5tn in first three months of 2022, the Institute of International Finance said in its latest Global Debt Monitor report.
“This marks the first quarterly drop since the third quarter of 2018,” the IIF said. “While much of this is a valuation effect — as other G10 currencies slumped over 12 per cent against the US dollar this year — a rapid slowdown in debt issuance has also contributed.”
After consistent declines over recent quarters, the global debt-to-gross domestic product ratio, however, edged up and is set to climb to more than 350 per cent of the world’s GDP by the end of this year.
The ratio rose for the first time in the past five quarters as emerging market debt levels rose at a faster pace to 252 per cent of GDP.
“[This is] largely reflecting the hit from a sharp slowdown in EM [emerging market] growth and suggesting that inflationary pressures have not been high enough [yet] to bring debt ratios down,” the Washington-based institute said.
“We expect this rise in debt ratios to continue at least through the end of 2022.”
Although higher rates have disrupted the borrowing plans of many businesses and consumers, governments may borrow more to address concerns triggered by a rapid slowdown in growth, particularly in China and Europe.
Rising social tension, due to higher energy and food prices are also likely to push sovereigns and state-owned enterprises to borrow more to soften the impact of the economic slowdown, the IIF said.
Central banks poured more than $25tn to support the global economy during the Covid-19 pandemic but are now battling rampant inflation.
Policymakers have tightened monetary policy by raising interest rates to curb inflation, which is at four-decade highs in the US and the UK.
Elevated consumer prices in Europe forced the European Central Bank to raise interest rates by a record 75 basis points earlier this month.
The IIF said overall debt in mature markets declined by $4.9tn to about $201tn in the three months to the end of June.
The US and Canada were the only countries where debt levels rose during the period.
The decline in debt in dollar terms across emerging markets was much smaller, at about $600 billion, bringing total emerging markets borrowings to about $99tn, according to the IIF data.
The sharp increase in borrowing costs has led to a substantial fall in issuance in syndicated loan markets, while non-financial corporate long-term bond transactions sunk to their slowest level since 2014.
“Over the first eight months of 2022, the pace of government bond issuance was some 20 per cent below the same period in 2021. Adjusted for inflation, global bond issuance volumes are now at multi-year lows,” the IIF said.
Rising inflation and the strengthening of the US dollar are also undermining the creditworthiness of many sovereign borrowers in emerging markets as “disparities in market access have become starker”.
“Elevated debt vulnerabilities have already forced a handful of high-yield issuers to seek IMF [International Monetary Fund] support, including Sri Lanka and Ghana,” the IIF said.
Globally, corporate issuers are also finding it difficult to approach markets and are already struggling to service debt as the era of cheap borrowing draws to a close.
“Over the last decade, low interest rates gave many smaller, less successful firms a lifeline through cheap debt financing,” the IIF said.
“Looking ahead, a significant increase in bankruptcies may well be on the cards as borrowing costs rise, which will make it quite challenging for central banks to engineer a soft landing without adverse implications for job markets.”
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In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Health Valley
Founded in 2002 and set up as a foundation in 2006, Health Valley has been an innovation in healthcare for more than 10 years in Nijmegen, the Netherlands.
It serves as a place where companies, businesses, universities, healthcare providers and government agencies can collaborate, offering a platform where they can connect and work together on healthcare innovation.
Its partners work on technological innovation, new forms of diagnostics and other methods to make a difference in healthcare.
Its agency consists of eight people, four innovation managers and office managers, two communication advisers and one director. It gives innovation support to businesses and other parties in its network like a broker, connecting people with the right organisation to help them further
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
ABU DHABI TRIATHLON
For more information, and to enter the race, please visit www.abudhabi.triathlon.org.
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Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.
We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice.
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
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Profile box
Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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GOLF’S RAHMBO
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Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
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Name: Steppi
Founders: Joe Franklin and Milos Savic
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Second round raised Dh720,000 from silent investors in June this year
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TOUCH RULES
Touch is derived from rugby league. Teams consist of up to 14 players with a maximum of six on the field at any time.
Teams can make as many substitutions as they want during the 40 minute matches.
Similar to rugby league, the attacking team has six attempts - or touches - before possession changes over.
A touch is any contact between the player with the ball and a defender, and must be with minimum force.
After a touch the player performs a “roll-ball” - similar to the play-the-ball in league - stepping over or rolling the ball between the feet.
At the roll-ball, the defenders have to retreat a minimum of five metres.
A touchdown is scored when an attacking player places the ball on or over the score-line.
Yemen's Bahais and the charges they often face
The Baha'i faith was made known in Yemen in the 19th century, first introduced by an Iranian man named Ali Muhammad Al Shirazi, considered the Herald of the Baha'i faith in 1844.
The Baha'i faith has had a growing number of followers in recent years despite persecution in Yemen and Iran.
Today, some 2,000 Baha'is reside in Yemen, according to Insaf.
"The 24 defendants represented by the House of Justice, which has intelligence outfits from the uS and the UK working to carry out an espionage scheme in Yemen under the guise of religion.. aimed to impant and found the Bahai sect on Yemeni soil by bringing foreign Bahais from abroad and homing them in Yemen," the charge sheet said.
Baha'Ullah, the founder of the Bahai faith, was exiled by the Ottoman Empire in 1868 from Iran to what is now Israel. Now, the Bahai faith's highest governing body, known as the Universal House of Justice, is based in the Israeli city of Haifa, which the Bahais turn towards during prayer.
The Houthis cite this as collective "evidence" of Bahai "links" to Israel - which the Houthis consider their enemy.
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
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1) Breast cancer is men is rare but can develop rapidly. It usually occurs in those over the ages of 60, but can occasionally affect younger men.
2) Symptoms can include a lump, discharge, swollen glands or a rash.
3) People with a history of cancer in the family can be more susceptible.
4) Treatments include surgery and chemotherapy but early diagnosis is the key.
5) Anyone concerned is urged to contact their doctor
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
