Debt pressure is piling up on developing countries and emerging markets from rising trade uncertainty, adding to their woes from high debt levels and sluggish growth, Reuters reports, citing the World Bank Chief Economist Indermit Gill.

About half of the developing countries are now at risk of default or rapidly approaching that point, double the 2024 rate, Gill warned. For emerging markets, net interest payments now account for 12% of their GDP, up from 7% in 2014.

The situation is even worse in poorer countries, where 20% of their GDP goes to debt services, double the rate a decade ago. This is forcing governments to cut back on vital services like healthcare and education.

REMEMBER- The IMF revised its global growth forecast for 2025 to just 2.8%, a 0.5 percentage point cut from its January estimate, warning that further trade tensions would drag growth further down. With decade-high uncertainty indices, global economists expect the World Bank to announce significant cuts to both growth and trade forecasts in June, Gill added.

Global trade is expected to grow by just 1.5%, a significant decrease from the 8% seen in the 2000s. Meanwhile, foreign direct investment now accounts for only 1% of the developing countries’ GDP, a drop from the 5% seen during more prosperous periods, further hindering emerging markets, according to Gill.

The way out? Trade agreements with the US would ease the pressure on emerging markets through tariff reductions and their extension to other countries. “Doing so now made sense,” said Gill, highlighting the World Bank’s models that predict a significant boost to growth with such agreements. Unlike other crises, this one is driven by government policies, which could be reversed, he added.

MARKETS THIS MORNING-

Asian markets are mostly in the green this morning, as Hong Kong’s Hang Seng is up 0.5%, while Japan’s Nikkei is inching up 0.4%. Meanwhile, Wall Street futures remain flat after a day of modest gains for S&P 500, Nasdaq and the Dow.

TASI

11,785

+0.2% (YTD: -2.1%)

MSCI Tadawul 30

1,499

+0.1% (YTD: -0.7%)

NomuC

28,421

-0.5% (YTD: -9.7%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

32,015

+0.5% (YTD: +7.7%)

ADX

9,468

+0.8% (YTD: +0.5%)

DFM

5,216

+1.0% (YTD: +1.1%)

S&P 500

5529

+0.1% (YTD: -6.0%)

FTSE 100

8417

+0.02% (YTD: +3.0%)

Euro Stoxx 50

5170

+0.3% (YTD: +5.6%)

Brent crude

USD 65.62

-1.9%

Natural gas (Nymex)

USD 3.17

+7.9%

Gold

USD 3347.70

+1.5%

BTC

USD 94,520.80

+0.2% (YTD: +1.0%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.2% yesterday on turnover of SAR 6.5 bn. The index is down 2.1% YTD.

In the green: Masar (+9.8%), Albabtain (+6.7%) and Saudi Re (+6.1%).

In the red: Nice One (-3.9%), ACIG (-3.9%) and Solutions (-3.3%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.5% yesterday on turnover of SAR 25.9 mn. The index is down 9.7% YTD.

In the green: Almodawat (+12.9%), Albattal Factory (+9.0%) and Taqat (+8.7%).

In the red: Dar Almarkabah (-12.1%), Almohafaza For Education (-7.4%) and NBM (-6.6%).

CORPORATE ACTIONS-

Arabian Cement’s BoD recommended a share buyback of up to 150k shares, which will be retained as treasury shares for its long-term employee incentives program, it said in a disclosure to Tadawul. The repurchase will be financed through internal resources and is set to wrap up within 12 months following the general assembly’s approval.

Al Modawat Specialized Medical Hospital’s BoD proposed a 200% capital increase to SAR 71.3 mn, it said in a disclosure to Tadawul. The increase will be funded by tapping SAR 47.5 mn from the company’s share premium reserve, and shareholders will receive two additional shares for each one they hold.

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