Daily Economic Update

US: Bessent finalizes a shortlist of five Fed Chair contenders. US Treasury Secretary Bessent, who is currently leading interviews to select the next Fed Chair when Powell’s term ends in May 2026, has finalized a shortlist of five contenders. They include two existing Fed governors, Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock’s Rick Rieder. Bessent is aiming to give his final recommendations to President Trump after the Thanksgiving holiday and Trump is likely to make his decision before the end of the year. The President’s nominee for Fed Chair would have to be confirmed by the Senate. If an outsider to the current Fed board of governors, the nominated person would first need to be appointed to the Fed board in early 2026 (which also requires Senate confirmation) replacing the temporarily-appointed Governor Stephen Miran. 

UAE: Federal government outlines a massive budget expansion to sustain growth. The cabinet has approved the largest federal budget in the nation’s history at AED92.4 billion for 2026, marking a 29% increase versus 2025’s allocation and a notable acceleration from the 11.6% budget-on-budget recorded in the previous year. This expansion implies a push to sustain economic growth momentum in the face of rising trade tensions and a global economic slowdown. While non-oil growth has remained strong, it decelerated from an exceptional 7% in 2023 to 5% in 2024, prompting the government to reinforce support through targeted spending. The budget aligns revenues and expenditures, underscoring the government’s commitment to fiscal discipline while supporting strategic development priorities. The cabinet also reviewed the UAE’s outward foreign direct investment performance, which rose by 9% to reach around AED1 trillion ($286 billion) in 2024. Meanwhile, the Ministry of finance unveiled the “retail Sukuk” initiative which would enable individual local investors to participate in government-backed Treasury Sukuks, with a minimum investment threshold set at AED4,000.

Bahrain: Consumer inflation rate zero in September 2025. CPI inflation reached 0% y/y (0.5% m/m) in September, reversing from a deflation of 0.8% y/y in August. The price deflation eased mainly because of slower decreases in food and non-alcoholic beverages (-0.6% vs -3.8% in August), clothing and footwear (-3.8% vs -5.3%), housing and utilities (-1.4% vs -1.6%), and recreation and culture (-0.9% vs -1.3%), while transportation prices remained unchanged. Additional upward pressure came from faster price growth in education amid the back-to-school season (2.8% vs 0.8%), restaurants and hotels (2.2% vs 1.4%), and miscellaneous goods and services (4.2% vs 2.2%). Meanwhile, costs continued to fall for furnishings, household equipment, and routine household maintenance (-1.9% vs -1.0%) and for alcoholic beverages and tobacco (-0.5% vs 0%), while inflation slowed for health (0.2% vs 5.3%) and communication (0.5% vs 2.6%).

Chart 1: Bahrain CPI inflation (% y/y) Source: Haver

Saudi Arabia: PIF becomes anchor investor in new Tadawul-listed ETF. The Public Investment Fund (PIF) became anchor investor in the newly launched Albilad MSCI Saudi Equity exchange traded fund (ETF), the first broad-market, Shariah-compliant ETF in Saudi Arabia. Listed on Tadawul, the ETF tracks the MSCI Saudi Arabian Index, offering exposure to over 250 companies across small, mid, and large-cap segments from both main and parallel markets. With this, PIF looks to deepen Saudi capital markets, enhance liquidity, mobilize capital inflows, boost investor confidence, and position Saudi Arabia as a regional hub for advanced investment solutions. This also includes facilitating the listing of Saudi ETFs in major international financial centers such as Hong Kong, Tokyo, Frankfurt, London, and Singapore.

Egypt: China to exempt Egyptian exports from customs duties by November end. China will begin exempting Egyptian exports from import duties by the end of November, according to the Chinese Ministry of Commerce. The move should play a major role in rebalancing Egypt’s trade relationship with the world’s manufacturing powerhouse, boosting exports, and supporting USD inflows. Egyptian exports to China are miniscule at only $203mn compared to its imports of $8bn from China, according to central bank data for FY24/25. The step follows China’s broader initiative, announced at the China-Africa Economic and Trade Expo in June, to grant zero-tariff access to all 53 African nations with whom it maintains diplomatic relations. For Egypt, this comes as Chinese investment and corporate presence continue to expand. The decision is expected to lift bilateral trade and enhance Egypt’s export competitiveness, particularly in agriculture and manufacturing. Egyptian authorities aim to substantially raise exports to China to around $5bn within five years, driven by China’s growing demand for Egyptian citrus, grapes, and onions.

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