Saudi Arabia, Jordan discuss expediting customs procedures to boost trade exchange

LONDON: The global debt-to-GDP ratio rose for the first time since 2020 last year, as the world’s debt stock hit a new year-end record of $318 trillion and economic growth slowed, an Institute of International Finance report showed on Tuesday.
The $7 trillion rise in global debt was less than half of the 2023 increase, when expectations of Federal Reserve interest rate cuts sparked a borrowing surge. The IIF warned, however, that so-called bond vigilantes could punish governments if rising fiscal deficits persist.
“The increasing scrutiny of fiscal balances — particularly in countries with highly polarized political landscapes — has been a defining feature of recent years,” the IIF said.
Market reactions to fiscal policies in the United Kingdom brought down the short-lived tenure of Prime Minister Liz Truss in 2022, while similar pressures in France ousted Prime Minister Michel Barnier last year.
Debt-to-GDP — an indicator of the ability to repay debt — approached 328 percent, a 1.5 percentage point increase, as government debt levels of $95 trillion clashed with slowing inflation and economic growth.
The IIF said it expects debt growth to slow this year, amid unprecedented global economic policy uncertainty and still-elevated borrowing costs.
It warned, though, that despite high borrowing costs and economic policy uncertainty, its forecast of a $5 trillion increase in government debt this year could rise due to calls for fiscal stimulus and larger military spending in Europe.
“I think we will likely see much more volatility in sovereign debt markets, especially in those countries where we see high political polarization,” said Emre Tiftik, the IIF’s director of sustainability research.
ROLLOVER CHALLENGE
Emerging markets, driven by China, India, Saudi Arabia and Turkiye, accounted for roughly 65 percent of global debt growth last year.
This borrowing, along with a record $8.2 trillion in debt which emerging markets need to roll over this year — 10 percent of it in foreign currency — could strain countries’ abilities to weather looming political and economic storms.
“Heightened trade tensions and the Trump administration’s decision to freeze US foreign aid, including cuts to USAID, could trigger significant liquidity challenges and curb the ability to roll over and access to FX debt,” the report said.
“This underscores the increasing importance of domestic revenue mobilization to build resilience against external shocks.”
Tiftik added that the high volatility underscored the need to increase multilateral development banks’ abilities to mobilize private capital.
Several developing economies, such as Kenya and Romania, have struggled to boost domestic revenue due to public anger over tax hikes and coming elections, respectively.

BENGALURU: Electric vehicle maker Lucid Group said on Tuesday that Peter Rawlinson, its CEO for over 5 years, is stepping down from the role, and forecast its vehicle production will more than double this year, sending the company’s shares up 10 percent in extended trading.

Through his 12-year tenure as part of the top brass at Lucid, Rawlinson helped launch the company’s Air models and guided it through its public offering.

The company’s operating chief, Marc Winterhoff, will take the position of interim CEO.

Saudi Arabia’s Public Investment Fund is the majority shareholder in Lucid Group via Ayar Third Investment Co., and in October it invested an additional $1.5 billion into the EV producer.

“Now that we have successfully launched the Lucid Gravity, I have decided it is finally the right time for me to step aside from my roles at Lucid,” Rawlinson said.

The firm also forecast vehicle production this year to be around 20,000, compared with around 9,000 cars it made in 2024.

Andres Sheppard, senior equity analyst at Cantor Fitzgerald, said the CEO transition is “surprising” but not unexpected given the company’s previous underperformances, adding that the production forecast is “encouraging.”

The company hired veteran finance professional Taoufiq Boussaid as its chief financial officer last month. Boussaid previously helped reduce debt load for his former company.

As the EV demand in the US remains uncertain, Lucid has been trying to diversify its product lineup and step into the SUV market with the Gravity model, going toe-to-toe with Tesla’s model X and Rivian’s R1S vehicles.

The success of the Gravity SUV is seen as crucial to Lucid’s long-term outlook, as it burns through cash ramping up production while its Air sedans have seen price cuts due to slower demand.

“They (Lucid) still have an amazing product. Now it’s just a matter of can they turn the company around, can they increase demand and production with the Gravity, and really that’s going to bridge the gap to their mid-size vehicle in 2026,” Sheppard said.

The company continues to lose tens of thousands of dollars per vehicle, while rivals such as Rivian move aggressively to cut costs in a bid to make profits.

Lucid reported revenue of $234.5 million, beating Wall Street expectations of $214.2 million, according to data compiled by LSEG.

It posted a loss of $397.2 million in the quarter ended Dec. 31, compared with a loss of $653.8 million a year ago.

Demand for pure battery cars in the US has been slow as people gravitate more toward cheaper hybrids owing to high interest rates and economic uncertainty.