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Daily Economic Update
16.09.2025Saudi Arabia: Inflation ticks up though housing rental price hikes ease. Consumer price inflation rose to 2.3% y/y (0.1% m/m) in August from 2.2% in July, accelerating for the second month in a row, General Authority for Statistics data showed. Price increases in the key housing & utilities category decelerated but remined high at 5.8% y/y (July 6.2%), driven by a 7.6% rise in rentals. Housing rental price increases, especially in the largest urban areas, such as Riyadh and Jeddah, reflect robust demand for housing amid improving non-oil economic fundamentals. Policy support has underpinned demand and will continue to do so with the latest initiative, the foreign ownership law, scheduled for 2026, while efforts are underway to expand housing supply more quickly (for example by lifting new development restrictions) and even contain rental prices rises through consideration of potential price caps. There were also relatively high readings across the recreation & culture (2.7%), restaurants & hotels (3%), and miscellaneous goods & services (4.8%) categories. Core inflation, which excludes food & energy items, stood at 2.9% y/y. Overall, inflation could average 2.2% this year, up from 1.7% in 2024.
Egypt: EGP trades choppy against USD in September. This month’s movements in the Egyptian pound have mostly reflected the pattern seen in the US dollar on a global basis. The EGP started the month with high appreciation momentum against the dollar, rising by 1.2% in the first week. However, appreciation fever then started to fade, with the local currency trading horizontally in the second week, largely mimicking the trend that the USD is currently seeing in the global currency market. The sudden prior appreciation wasn’t attributed to carry trade flows as the recent data showed that the net inflows in the first week were only $70mn, while they surged by almost 10x in the second week, with inflows reaching $709mn. Therefore, we think that despite some positive economic momentum, for now, it remains difficult to judge the underlying strength of the Egyptian currency at a time when the CBE is embarking on an easing cycle.
US: Appeals court allows Fed Governor Cook to remain in office for now, while the Senate confirms Miran’s Fed appointment. The US Court of Appeals for the District of Columbia upheld an earlier ruling issued by a lower court to allow Federal Reserve Governor Lisa Cook to retain her post just ahead of the two-day FOMC meeting that starts today while the litigation is ongoing. Previously, the Trump administration had fired Cook on alleged mortgage frauds and filed an appeal against the lower court’s decision that had temporarily reinstated her. In another Fed development, the Senate confirmed the nomination of the current chair of the White House Council of Economic Advisers, Stephen Miran, to the Fed Board, paving the way for his participation in today’s FOMC meeting. However, his appointment will only be until the remaining term of the outgoing member Adriana Kugler, which ends in January 2026. The market widely expects the bank to resume its rate-cutting cycle at the September 16-17 FOMC meeting with a 25-bps reduction in the policy interest rate. Also, more interesting would be any clues about the path ahead and if there will be any dissenters. Finally, Trump announced that he will speak with Chinese President Xi on Friday following talks between US and Chinese officials on issues related to TikTok’s US-related operations. Post these developments, US Treasury Secretary Bessent mentioned that another round of discussions with China, focusing on a trade deal, would take place next month.
Eurozone: Merchandise trade surplus in July slightly higher than expected but lower y/y. The Eurozone recorded a trade surplus of €12.4 billion in July 2025, down from €18.5 billion a year earlier, as export growth was subdued in July while imports accelerated. Exports rose slightly in July (0.4% y/y) while imports increased by 3.1%, driven by higher demand for chemicals, machinery, and vehicles. For the first seven months of 2025, the Eurozone’s exports are up by 3.5% y/y while its imports increased by a slightly higher 4.7%. With regards to trade with the US specifically, the EU’s exports to the US fell by 4.4% y/y in July, but its imports rose by 10.7%, narrowing the EU’s surplus with the US to €13 billion in July 2025 from €18 billion in July 2024. Overall, while merchandise trade remains a net positive for the Eurozone’s economy, the bloc is faced with increased external headwinds given the tariffs imposed by the US and potentially higher imports from China.