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Daily Economic Update
11.11.2025
US: Senate passes short-term funding deal, paving the way for reopening the government. The US Senate passed a short-term funding deal in a 60-40 vote this morning after eight Democrat Senators broke with the party’s stance. These measures will now need to be approved by the House (a vote is likely to take place on Wednesday) before it goes to President Trump for the final stamp to formally end the shutdown. As per the stopgap deal structure, government functions will remain open through January 30, 2026, with some specific agencies including, Agriculture and Veterans Affairs departments and the Food and Drug Administration, through September 30, 2026. Additionally, it calls for suspending layoffs of federal workers until January 30, with back pay for all unpaid government employees during the shutdown. The key Democrats’ demand related to the extension of subsidized healthcare insurance has remained unresolved. The Democrat Senators who voted for the funding deal settled for a Republican promise that the Senate will vote on that extension by mid-December. However, there is no guarantee that the Senate will vote yes for that extension. In addition, the House Speaker did not promise a House vote on the matter. Hence, if that matter remains unresolved by the end of January, it is possible that there will be renewed eruption in the political gridlock then.
Japan: BoJ summary of opinions highlights the growing case for a rate hike. The Bank of Japan released its summary of opinions from its October meeting, showing that conditions for a rate hike likely “have almost been met”. Despite that, the summary shows that the bank still wants to remain cautious, monitoring the impact of trade policy, exchange rates, and inflation before making a final interest rate decision. On trade policy, the BoJ also highlighted that Prime Minister Takaichi’s trade deal with the United States has reduced uncertainty, allowing the country’s projected economic growth to increase at a faster pace than previously thought. The BoJ has kept rates unchanged since January, with the market currently expecting a hold in December’s meeting, but a rate hike in Q1 2026.
UAE: Dubai’s economic momentum accelerates in Q2 2025. Dubai’s economy grew by 4.7% y/y in Q2 2025, up from 4% y/y in the previous quarter, logging its highest quarterly growth in three years, according to the Government of Dubai. This expansion came mainly from the robust performance in the human health and social work sector, which surged by 20% y/y and the solid gains seen in construction (14.9% y/y), finance & insurance (7.7%), accommodation and food services (6.9%), and the real estate sectors (6.4%). The strong growth in Dubai in Q2 came in line with that seen in Abu Dhabi during the same period, which logged an acceleration in y/y growth to 6.6% in Q2. However, growth is expected to moderate in H2 2025. Despite that, we forecast UAE growth to remain robust at 4.8% for the full year, positioning the country as a leader in economic performance across the GCC.
Egypt: Inflation accelerates for the first time in four months. Urban inflation rose to 12.5% y/y (1.8% m/m) in October, up from 11.7% (1.8% m/m) in September, marking the first acceleration in four months, according to CAPMAS. The pickup was driven primarily by housing-related costs and food and beverages, with the housing, water, electricity, gas, and fuel group surging 27% y/y. A major driver was the sharp jump in imputed rentals, which climbed 42% y/y (17.5% m/m) following the recent amendments to the Old Rent Law, building on a 22% y/y (12% m/m) rise in September. Importantly, the impact of the latest fuel price hike has not yet appeared in the October reading. Core inflation also accelerated to 12.1% y/y (2% m/m), up from 11.3% (1.5% m/m) in September, reflecting broader underlying price pressures. We reiterate our expectation that inflation will continue to rise over the next 3–4 months, with the fuel price adjustment expected to feed into November’s reading and persist into early 2026. Given the likely near-term inflation uptrend, the CBE may prefer to pause at its upcoming 20 November MPC meeting, despite having room to cut rates. Such a pause would underscore the CBE’s commitment to inflation targeting as its primary mandate, allowing more time to assess the full pass-through of the recent reforms and price adjustments.
Saudi Arabia: Industrial Development Fund plans significant growth of the factory base. Saudi Arabia aims to triple its number of factories from 12,000 to 36,000 as part of its industrial expansion strategy, according to Fahad Alnaeem, CEO of the Saudi Industrial Development Fund (SIDF) Investment Company. A key driver of this growth is the startup Aajil, which provides rapid financing (within 24 hours) for small and medium-sized factories to purchase raw materials, thereby improving their working capital. SIDF’s investment in Aajil marks its first venture into a startup, signaling a shift toward more agile, digital financial solutions. The fund, established in late 2023, also plans to support industrial growth through both equity and debt instruments across 12 strategic sectors and four emerging ones, including energy, logistics, and mining. Key economic benefits include potential manufacturing output and employment gains thereby contributing to higher non-oil GDP, promoting the growth of SMEs via improved financing, and faster progress towards economic diversification - one of the key goals of the Vision 2030 initiative.