GCC can stand up to the pounding, Georgieva says

Watch this space

#1- The GCC can withstand war-related shocks, IMF chief says. Strong institutions and economic diversification will allow Gulf economies to absorb shocks from the US-Iran war, IMF Managing Director Kristalina Georgieva told Asharq Business. That being said, the global lender will “somewhat” lower its growth forecast for GCC nations, she added. Global growth, too, will see a downward revision.

Watch this space: The regional war and its economic impact is expected to dominate discussions among policymakers during the IMF and World Bank’s annual spring meetings, which will kick off next Monday, 13 April.

#2- Committed…ish? Asia’s largest low-cost carrier (LCC) Air Asia is still planning to make the June launch date for its Bahrain hub, the CEO of the Malaysia-based carrier Bo Bingham said in a presser on Monday. But that could change if the war drags on, with Bingham suggesting the airline is open to exploring other locations to back its Kuala Lumpur-London routes. “Anything is possible,” he said.

Why it matters: Air Asia’s Bahrain hub plan is a win-win for both the country and the carrier. For Air Asia, it would help it tap into the booming budget flying market in the region, especially for Gulf-Asia and Europe-Asia itineraries. Meanwhile, Bahrain has lagged behind its peers in the region in LCC growth — and Air Asia’s hub could help it seize on unrealized growth potential.

It would be good news for regional LCC champions including Flydubai and Air Arabia if Air Asia were to scrap its Bahrain plans in the face of the war. Their business models are backed primarily by Asia connections, making them Air Asia’s main competitors.

REMEMBER- The war is fundamentally changing the math for LCCs, whose business model is the most sensitive to price shocks like the war-driven surge in jet fuel rates, Sindy Foster, principal managing partner at Avaero Capital Partners, previously told us. Still, Air Asia recently added a 20% fuel surcharge and hiked its ticket prices by 31-40%.

#3- Algeria will head to the polls to vote in a new parliament on 2 July, according to apresidential decree. Ahead of the elections, the government will kick off an “exceptional revision” of voting lists next week, the decree said. The country’s parliament is currently dominated by the government-aligned National Democratic Rally (RND) and the National Liberation Front (FLN).

Sign of the times

More security pacts with Kyiv: Syria and Ukraine agreed to increase security cooperation between the two countries, as Ukrainian President Volodymyr Zelensky continues his wartime tour of the Middle East.

Why it matters: The agreement, which follows defense cooperation frameworks Ukraine signed with Saudi Arabia and Qatar last month, is a signal that Syria is opening its door to more allies than just Russia. The cooperation with Ukraine also gives Syria a path to food security and, possibly, the modernization of its military, considering Ukraine’s position as a major grain exporter and its defense expertise.