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CAIRO — Annual inflation in Egypt hit 39.7 per cent in August, official figures showed Sunday, an all-time high as the Arab world's most populous country grapples with a punishing economic crisis.

It comes after a previous record of 38.2 per cent in July and amid an unrelenting downturn that has seen the currency shed half its value against the US dollar since early last year.

Food and drink prices alone rose 71.9 per cent year-on-year, said the state statistics agency CAPMAS.

The economic crisis in the import-dependent country was catalysed by Russia's invasion of Ukraine last year, which destabilised crucial food supplies and unsettled global markets.

Investors pulled billions out of Cairo's foreign reserves, which remain buoyed by deposits from wealthy Gulf allies, whose promises to purchase Egyptian state assets have however fallen short of government targets.

Even before the current crisis, 30 per cent of Egyptians were living below the poverty line, according to the World Bank, with another 30 per cent considered vulnerable to also falling into poverty.

Egypt, with more than 105 million people, has been dependent on bailouts in recent years, from both oil-rich Gulf allies and the International Monetary Fund (IMF).

According to ministry of planning figures, the country's external debt bill has tripled over the past decade, rising to a record high of $165.4 billion this year.

Researcher Robert Springborg of the Italian Institute of International Affairs has blamed Egypt's economic model, in which the military plays a key role, arguing it is based on "profligate borrowing for prestige projects with limited economic benefits".

The crowning jewel of the government's projects is the $58 billion New Administrative Capital that experts have called "a vanity project".

Delayed IMF programme 

Last year, the IMF approved a $3 billion loan for Egypt conditioned on "a permanent shift to a flexible exchange rate regime".

The smaller-than-expected loan was intended to unlock other sources of funding, namely from regional allies.

But Egypt has failed to raise its target funding, and the IMF has not issued its first review of the programme or the second tranche of the loan. Both were originally expected in March.

The IMF and Gulf capitals have demanded a fully flexible exchange rate, economic reforms and an end to the notoriously obscure business dealings of the military. 

But despite repeated rumours of a fresh devaluation, authorities have kept the pound pegged at around 31 EGP to the dollar since January.

Consumer prices have continued to steadily rise, adding to the burden of families who are struggling to make ends meet.

Severe foreign currency shortages have also heavily impacted the economy, limiting imports and causing a parallel currency market to surge up to 25 per cent higher than bank rates.

Remittances from Egyptians abroad, the country's biggest source of foreign revenue, have been falling since the crisis began, as people turn to the parallel market to send money home.

Between July 2022 and March 2023, the central bank reported a 26.1 per cent fall in remittances — one of several "volatile, vulnerable" sources of foreign currency Egypt relies on, according to Springborg.

Cairo's foreign reserves have slowly inched upwards since the crisis began, reaching $34.9 billion in August, according to the central bank — still $7 billion less than before the Ukraine war.

Around $29 billion of those are deposits from wealthy Gulf allies, according to the central bank.

NEW DELHI — Major G20 partners will unveil ambitious plans Saturday to bolster trade between India, the Middle East and Europe, a modern-day Spice Route to bind regions that account for about a third of the global economy.

Washington, Saudi Arabia, the EU, the United Arab Emirates and others will sign an agreement on the sidelines of the G20 summit in New Delhi, presenting an alternative to China's wide-ranging strategic infrastructure investments.

Officials told AFP the plan would include a slew of data, rail, electricity and hydrogen pipeline projects.

One proposed project would link railway and port facilities across the Middle East — including the United Arab Emirates, Saudi Arabia, Jordan and Israel — potentially speeding trade between India and Europe by up to 40 per cent.

"The India — Middle East — Europe economic corridor" is "nothing less than historic" European Union leaders are expected to say when the details of the plans are unveiled later Saturday. 

The agreement would boost trade but is also seen as another significant step towards Arab Gulf states normalising relations with Israel.

Washington is actively prodding Riyadh — a major oil producer and security partner — to normalise ties with Israel after decades of conflict and closed borders.

The initiative "has enormous potential", according to Jon Finer, US deputy national security adviser.

He said the public announcement would come after "months of careful diplomacy, quiet, careful diplomacy, bilaterally and in multilateral settings".

The Europe-to-India project is still in the early stages, with participants studying how best to link India's vast 1.4 billion population and quick-growing economy with markets to the west.

According to details seen by AFP, the India — Middle East — Europe economic corridor would also develop infrastructure to enable the production and transport of "green hydrogen".

It would also strengthen telecommunications and data transfers through a new undersea cable connecting the region.

Michael Kugelman, South Asia Institute director at The Wilson Centre, said the plan could be a significant response to China's much-vaunted Belt and Road Initiative (BRI).

The so-called BRI has spread Chinese influence, investments and commerce across Europe, Africa, Asia and Latin America.

"If finalised, it would be a game changer that strengthens connectivity between India and the Middle East and would aim to counter BRI," Kugelman posted on X, formerly known as Twitter.

COPENHAGEN — Massive demand for diabetes and weight loss drugs made by Danish pharmaceutical group Novo Nordisk have turned it into Europe's most valuable company, giving Denmark's economy a major makeover.

"If it wasn't for Novo Nordisk there wouldn't have been any growth" in the first six months of the year, Danske Bank chief economist Las Olsen told AFP.

The company's earnings have ballooned thanks to two in-demand prescription medications: type 2 diabetes drug Ozempic — made famous by US celebrities for its weight loss side effects — and obesity drug Wegovy.

In the first half of 2023, Denmark's economy grew by 1.7 per cent year-on-year, official data showed.

Excluding the pharma industry, it shrank by 0.3 per cent.

"We've never seen anything like it, it's changing the picture of the economy," said Statistics Denmark analyst Jonas Petersen.

Industrial production in Denmark "is up 40 per cent compared to pre-pandemic levels", noted Palle Sorensen, chief economist at Nykredit bank.

By comparison, "in the eurozone in general and in the US it's pretty much at the same level as before the pandemic", he said.

That "also means that the recovery from the pandemic has been stronger".

The Novo Nordisk effect is seen in the state's coffers — the company is the country's biggest taxpayer — as well as in Denmark's trade balance and employment figures.

Ramping up production 

Already the world's biggest insulin maker, Novo Nordisk saw sales of its obesity treatments soar by 157 per cent in the first half of the year.

The World Health Organization says more than a billion people suffer from obesity. More than 530 million have diabetes, according to the International Diabetes Federation.

On the back of its strong first-half sales, the company raised its full-year forecast and now expects 2023 sales to grow by 30 per cent from last year's 177 billion kroner ($25.5 billion).

Novo Nordisk's market capitalisation has soared to 2.98 trillion kroner, dethroning French luxury goods maker LVMH to become Europe's biggest listed company on September 1.

Denmark's gross domestic product reached 2.83 trillion kroner in 2022 and is expected to grow by 1.2 per cent this year.

The injectable drug Ozempic has grown hugely popular for its weight loss properties, though it is officially only prescribed for diabetes.

Wegovy, an anti-obesity treatment launched in the United States two years ago and now also available in Denmark, Germany, Norway and the UK, saw its sales soar by 344 per cent in the first half of the year.

"We are serving more patients than ever before," Chief Executive Lars Fruergaard Jorgensen said when the company released its earnings report in August.

The drugmaker is currently unable to meet the surge in demand and plans to build a new plant in Denmark to ramp up production.

Stabilising effect 

Experts warned that the company's success should not overshadow difficulties in the Danish economy.

"Other industrial firms in Denmark have a similar path to those of the rest of Europe and the US," Palle Sorensen said.

The Confederation of Danish Industry says the country's economy is "heavily influenced by a few select companies".

In 2022, another Danish titan, global shipping leader Maersk, posted record profits on the back of soaring freight prices.

"Denmark's total industrial production has increased by 11 per cent over the past year, but if we disregard the pharmaceutical industry, industrial production has fallen by 11 per cent," the Confederation's chief economist Allan Sorensen said.

Analysts say Novo Nordisk's rapid growth poses few risks and will likely have a stabilising effect on the economy.

"When the Danish economy becomes more dependent on pharmaceuticals, we are actually less exposed to the global business cycle because demand is quite steady over the business cycle," Palle Sorensen said.

"So that stabilises the Danish economy."

The company's success has also led to large foreign currency flows.

"There is a very large currency inflow coming from Novo Nordisk selling all this medicine outside of the country, but there's also a currency off-flow from the surpluses that Novo Nordisk is making, because the vast majority of the shareholders are in other countries," Olsen said.

To prevent the euro-pegged Danish krone from soaring too high, the central bank has kept its key interest rate below that of the European Central Bank, currently at 3.35 per cent compared to the ECB's 3.75 per cent.

MADRID — Spain said on Wednesday it would keep watch to ensure the "strategic autonomy" of Telefonica after Saudi Telecom (STC) acquired a significant stake in the Spanish telco giant, becoming its largest shareholder. 

In an announcement late Tuesday, STC said it had paid 2.1 billion euros ($2.25 billion) for a 9.9 percent share in Telefonica which has a strong presence in Latin America and the United Kingdom. 

"Telefonica is not just a flagship company but a strategic operator and the government is going to be vigilant to ensure Spain's strategic autonomy," government spokeswoman Isabel Rodriguez said. 

Speaking to reporters in Brussels, Economy Minister Nadia Calvino said the government had in recent years "strengthened" the mechanisms to protect its "strategic sectors" and pledged to apply "all necessary measures" to defend its interests. 

STC said the move would allow it to benefit from the "potential" offered by Telefonica's "unique portfolio of best-in-class infrastructure assets" while insisting it did "not intend to acquire control or a majority stake" in the company. 

Any foreign investor seeking to acquire a stake of 10 per cent or more in a strategic Spanish company must first seek Madrid's approval in a measure approved in 2020 to protect struggling firms during the pandemic. 

"Preserving our strategic autonomy is essential," wrote Labour Minister Yolanda Díaz on X, formerly known as Twitter, calling for "better regulation and protection to avoid" takeovers in companies considered strategically sensitive. 

In a statement, Telefonica characterised as "friendly" the acquisition by STC which is 64 per cent owned by Saudi's PIF sovereign wealth fund and has operations in Kuwait, Bahrain and Malaysia.

Telefonica, which has a strong presence in Brazil, Germany and the UK, posted a net profit of 2 billion euros last year although it has struggled with heavy debt levels. 

NAIROBI — The United Arab Emirates announced on Tuesday $4.5 billion in clean energy investments in Africa during a landmark climate summit hosted by Kenya that is aimed at attracting funding for efforts to combat global warming.

"We will deploy $4.5 billion... to jumpstart a pipeline of bankable clean energy projects in this very important continent," said Sultan Al Jaber, who heads the government-owned renewable energy firm Masdar, the UAE's national oil company ADNOC and the COP28 climate talks.

Heads of state, and government and industry leaders, are among thousands of attendees at the Nairobi summit where Africa is promoting its potential as a clean energy powerhouse.

The Africa Climate Summit will be followed by the COP28 summit later this year in Dubai, which is expected to feature competing agendas for the world's energy future. 

"If Africa loses, we all lose," warned Jaber, who is also the UAE's minister for industry and advanced technology.

He said the investment aimed "to develop 15 GW [gigawatts] of clean power by 2030" and "catalyse at least an additional $12.5 billion from multilateral, public and private sources".

As of 2022, the continent's renewable generation capacity was 56 gigawatts, according to the International Renewable Energy Agency.

The three-day event in Nairobi, which began Monday, is billed as bringing together African leaders to define a shared vision for green development on the diverse continent of 1.4 billion people. 

On Tuesday, the summit will offer proposals to reform global financial structures that have resulted in only a tiny fraction of investments in climate solutions being directed towards Africa.

Jaber called for a "surgical intervention of the global financial architecture that was built for a different era", urging institutions to lower debt burdens.

Countries in Africa are hamstrung by mounting debt costs and a dearth of finance, and despite an abundance of natural resources just three per cent of energy investments worldwide are made in the continent.

MUNICH — One of the world's biggest auto shows opened in Munich on Monday, with Tesla ending a 10-year absence to jostle for the spotlight with Chinese rivals as the race for electric dominance heats up.

Chancellor Olaf Scholz will officially inaugurate the IAA mobility show, held in Germany every two years, on Tuesday.

But carmakers used Monday's press preview as an early chance to show off some of the new models that will be hitting the road soon.

The industry-wide shift towards electric vehicles will be front and centre at this week's fair, with Chinese carmakers out in force as they eye the European market.

US electric car pioneer Tesla, owned by Elon Musk, will return to the IAA for the first time since 2013 and is expected to unveil a revamped version of its mass-market Model 3.

That Tesla, usually a holdout at such events, is coming to Munich shows it is taking the growing competition seriously, said Jan Burgard from the Berylls automotive consulting group

"The electric car market with its many new players will be divvied up over the next few years and people want to know: who is offering what?" Burgard told the Handelsblatt financial daily.

Having captured an increasingly large part of the prized Chinese market, Chinese upstarts are now hoping to win over European customers with cheaper electric cars.

Chinese manufacturers are starting "their assault on Europe with the IAA", said industry analyst Ferdinand Dudenhoeffer from the Center Automotive Research in Germany.

Muted European presence 

Chinese groups benefit from lower production costs, allowing them to offer cut-throat prices at a time when entry-level EVs are still a rarity.

Mercedes-Benz CEO Ola Kallenius said it was necessary for European firms to stay competitive in the face of stiff competition.

"Don't make it worse. Don't start a debate that we should work less hours at the same pay, those types of things. That would be going the wrong direction," Kallenius told reporters at the IAA on Sunday.

Volkswagen CEO Oliver Blume meanwhile said he was "impressed" by the speed at which China had advanced its electric car technology.

He added that it was "crucial" for VW to succeed in China's domestic EV market — where it is currently lagging far behind China's BYD and Tesla.

"The more electric cars we have, the more we can benefit from economies of scale," Blume said.

In all, 41 per cent of exhibitors at the industry fair have their headquarters in China, including brands such as BYD, Leapmotor and Geely.

Contrary to the Asian onslaught, participation from European carmakers at the IAA will be muted.

Germany's homegrown champions Volkswagen, BMW and Mercedes-Benz will be joined by Renault from France, but the 14-brand Stellantis Group will only be represented by Opel.

BMW presented its "Neue Klasse" (New Class) generation of electric cars in Munich on Saturday, a series of six vehicles that will be manufactured from 2025.

European automakers are investing heavily in the switch towards zero-emission driving as the European Union aims to end the sale of polluting combustion engine cars by 2035.

The historic transition comes at a challenging time.

While the supply chain problems caused by the pandemic have eased, surging energy prices in the wake of Russia's war in Ukraine and a weaker global economy are weighing on European manufacturers.

Although car sales in the EU have steadily improved over the last 12 months, they remain around 20 per cent below their pre-pandemic levels as inflation and higher interest rates dampen appetites for new vehicles.

Climate protests

Some 700,000 visitors are expected to attend this week's IAA.

Climate groups have vowed to stage protests, including acts of "civil disobedience" aimed at disrupting the fair. 

On Monday morning, Greenpeace activists submerged three cars in a small lake outside the convention centre. 

"The car industry continues to rely on too many cars, that are too big and too heavy. It's sinking the planet with that business model," Greenpeace spokeswoman Marissa Reiserer told AFP.

PARIS — The European Central Bank (ECB) is "close to the peak" of its inflation-fighting interest rate increases, Bank of France governor Francois Villeroy de Galhau said Friday.

While eurozone central bankers' "options are open" between further rate rises or holding steady at their next meeting on September 14, "we are close or very close to the peak of our interest rates," ECB Governing Council member Villeroy told journalists at a Paris breakfast meeting.

The Frankfurt institution began rate increases in July last year to tame soaring inflation in the 20-nation eurozone, with eight hikes so far bringing them to 3.75 per cent — a level not seen since 2001.

Minutes from the governors' last meeting in July showed that they considered holding firm but ultimately decided on a 0.25-per cent raise.

Whatever the decision this month "we are far from the moment where we can start thinking about lowering" interest rates, Villeroy said.

EU statistics agency Eurostat said Thursday that price growth held steady at 5.3 per cent in August, far higher than the ECB's two-per cent target.

The same day, ECB board member Isabel Schnabel said that "a sufficiently restrictive monetary policy is critical for bringing inflation back to our two-per cent target in a timely manner" — without tipping the bank's hand on the September decision.

Villeroy also said Friday that the Bank of France will slightly up its forecast for this year's French growth later this month, from its current 0.7 per cent — slightly below government expectations.

NEW YORK — The US Federal Trade Commission (FTC) announced an agreement on Friday allowing American drug manufacturer Amgen to proceed with its $28 billion takeover of Horizon Therapeutics.

The agreement addresses "potential competitive harm" posed by the takeover and will be subject to a 30-day comment period, the FTC said in a press release.

Under the deal, "Amgen will be prohibited from leveraging its drug portfolio to disadvantage rivals and will be required to seek prior approval before acquiring related products," the FTC said.

The US regulator had filed suit in May to block the purchase, arguing it would entrench the monopoly positions of Horizon's drugs to treat thyroid eye disease and chronic refractory gout respectively.

The agreement settles the FTC suit as well as one filed by six US states, the statement said.

Some of the requirements under the consent order will be valid until 2032, while others must be maintained for fifteen years after the agreement is finalised, said the FTC.

A monitor will be appointed to provide regular updates on Amgen's compliance to the FTC and the states.

Founded in 2005, Dublin-based Horizon develops and markets drugs to treat rare, autoimmune and inflammatory diseases.

Its flagship product is Tepezza, a treatment for thyroid eye disease sold in the US since 2020. It generated $1.7 billion in 2021, more than half of Horizon's sales.

Another major Horizon drug is Krystexxa, used in the treatment of chronic gout. The agreement with the FTC includes specific conditions for Tepezza and Krystexxa.

In a statement, Horizon and Amgen said they "anticipate being able to close the acquisition in early fourth-quarter 2023 and look forward to the opportunity to serve patients around the world suffering from rare diseases".

Shares of both companies jumped as US markets opened on Friday.

Near 2:30pm (1830 GMT), Amgen shares were up .27 per cent at $257.02, while Horizon shares were up 2.27 per cent to $115.30.