Richard Melson | Meta Intelligence

Science First Release, 10 July 2025

Accepted papers posted online prior to journal publication.

NASA Earth Science Division provides key data

by Dylan B. Millet, Belay B. Demoz, et al.

In May, the US administration proposed budget cuts to NASA, including a more than 50% decrease in funding for the agency’s Earth Science Division (ESD), the mission of which is to gather knowledge about Earth through space-based observation and other tools. The budget cuts proposed for ESD would cancel crucial satellites that observe Earth and its atmosphere, gut US science and engineering expertise, and potentially lead to the closure of NASA research centers. As former members of the recently dissolved NASA Earth Science Advisory Committee, an all-volunteer, independent body chartered to advise ESD, we warn that these actions would come at a profound cost to US society and scientific leadership.

[read more]

Spin-filter tunneling detection of antiferromagnetic resonance with electrically tunable damping

by Thow Min Jerald Cham, Daniel G. Chica, et al.

Antiferromagnetic spintronics offers the potential for higher-frequency operations and improved insensitivity to magnetic fields compared to ferromagnetic spintronics. However, previous electrical techniques to detect antiferromagnetic dynamics have utilized large, millimeter-scale bulk crystals. Here we demonstrate direct electrical detection of antiferromagnetic resonance in structures on the few-micrometer scale using spin-filter tunneling in PtTe₂/bilayer CrSBr/graphite junctions in which the tunnel barrier is the van der Waals antiferromagnet CrSBr. This sample geometry allows not only efficient detection, but also electrical control of the antiferromagnetic resonance through spin-orbit torque from the PtTe₂ electrode. The ability to efficiently detect and control antiferromagnetic resonance enables detailed studies of the physics governing these high-frequency dynamics.

[read more]

Scalable emulation of protein equilibrium ensembles with generative deep learning

by Sarah Lewis, Tim Hempel, et al.

Following the sequence and structure revolutions, predicting functionally relevant protein structure changes at scale remains an outstanding challenge. We introduce BioEmu, a deep learning system that emulates protein equilibrium ensembles by generating thousands of statistically independent structures per hour on a single GPU. BioEmu integrates over 200 milliseconds of molecular dynamics (MD) simulations, static structures and experimental protein stabilities using novel training algorithms. It captures diverse functional motions—including cryptic pocket formation, local unfolding, and domain rearrangements—and predicts relative free energies with 1 kcal/mol accuracy compared to millisecond-scale MD and experimental data. BioEmu provides mechanistic insights by jointly modeling structural ensembles and thermodynamic properties. This approach amortizes the cost of MD and experimental data generation, demonstrating a scalable path toward understanding and designing protein function.

[read more]

Negative capacitance overcomes Schottky-gate limits in GaN high-electron-mobility transistors

by Asir Intisar Khan, Jeong-Kyu Kim, et al.

For high-electron-mobility transistors based on two-dimensional electron gas (2DEG) within a quantum well, such as those based on AlGaN/GaN heterostructure, a Schottky-gate is used to maximize the amount of charge that can be induced and thereby the current that can be achieved. However, the Schottky-gate also leads to very high leakage current through the gate electrode. Adding a conventional dielectric layer between the nitride layers and gate metal can reduce leakage; but this comes at the price of a reduced drain current. Here, we used a ferroic HfO₂ – ZrO₂bilayer as the gate dielectric and achieved a simultaneous increase in the ON current and decrease in the leakage current, a combination otherwise not attainable with conventional dielectrics. This approach surpasses the conventional limits of Schottky GaN transistors and provides a new pathway to improve performance in transistors based on 2DEG.

[read more]

Is the World Broken?

Gabriel Marcel was a famous 20th century existence-watcher. He kept circling back to conundrums which preoccupied him his entire life.

The first was how to explain the profound difference between a problem and a mystery. He says, for example, that a problem is something that you can surround, but a mystery is something that surrounds you. He also calls into doubt the ideology of scientism (the belief that science and the scientific method are the best or only way to render truth about the world and reality). According to scientism, the story of mankind since the rise of modern science, with people such as Galileo, is the transformation of all mysteries into problems. With the passage of time, those problems would be solved. However, when we look around us at such science-thinkers like Roger Penrose, Neil Turok and Carlo Rovelli, we find that science is becoming more mysterious and the mysteries are increasingly deep, as anyone who follows quantum mechanics can see.

For the second he kept asking, how it is that I both have a body but that I am a body? Think of the phrase “I am somebody” and notice the last word. The physical body cannot be disentangled from personhood.

In 1933, Marcel published the famous play, Le Monde cassé (French: The Broken World). Compare that to the previous article, “Why Is the World So Nightmarish?” discussing Céline’s 1932 Journey to the End of the Night (French: Voyage au bout de la nuit). Both of these works describe a human world which is completely adrift, disoriented and soulless.

As an existential thinker, Marcel always watched humanity and did a soul-audit. He was not particularly attentive to the other dimension of our earthly stay, namely political economy. In order to make up for this semi-absence, we bring in Gustav Stresemann, who gives us the lens for it. Stresemann died within weeks of the Wall Street crash of 1929.

A few days before his death, Stresemann, the leading German statesman of his time, gave a speech at the League of Nations. In this, he gave an update on the German economic situation of the moment. He stated that the numbers were superficially encouraging, but that Germany, under the surface, was “dancing on a volcano.”

The concept of a country or indeed the whole world in these straits is very profound. It tells us that as people like Céline and Marcel warn us, the world is potentially broken at all moments because the people do not even have a concept of self-possession. Furthermore, the cracks underneath the foundation of the world economy indicate a dangerous fragility at all times. In this larger sense, Marcel’s concept of the broken world combined with Stresemann’s dancing on a volcano, allow us to glimpse an instability that current education does not cover.

Why Is the World So Nightmarish?

The phrase, “La Belle Époque” (French: “The Beautiful Era”) refers to the atmosphere in Europe and especially France, the high point of which lasted from 1900 to 1914, with the outbreak of World War I. The whole era was characterized by the phrase, “la douceur de la vie” (French: “the sweetness of life”). People of the time would say that if you weren’t alive then, they could not communicate how charming life was at the time.

The sinking of the Titanic in April, 1912 is the symbolic catastrophe that heralded the end of the era. Anyone who watched Downton Abbey would perhaps remember the opening scene, which depicts the newspaper announcing it with a screaming headline.

The great masterpiece, Journey to the End of the Night (French: Voyage au bout de la nuit, 1932), describes the whole world around World War I as a nightmarish battlefield of previously unseen scope. Céline’s protagonist, Ferdinand, travels the world, from battles in Europe to Africa, then to New York and Detroit’s Ford assembly line before returning to France, finding that the nightmare is global and inescapable.

Céline died within 24 hours of Ernest Hemingway. Hemingway is famous for the quote from The Sun Also Rises (set in the 1920s), “The world breaks everyone and afterward many are strong at the broken places. But those that will not break it kills.”

The question is how could we ever explain complete evaporation of the sweetness of life and transformation into such a nightmare, culminating into the world of today.

Lastly, think of the point made in Sebastian Haffner’s The Meaning of Hitler, how Hitler fit into this nightmarization of the world. Haffner writes:

It is impossible for a serious historian to maintain that without Hitler world history in the twentieth century would have taken the course it has taken. It is by no means certain that without Hitler a second world war would even have taken place; it is quite certain that if it had taken place it would have taken a different course — possibly even with different alliances, fronts and outcomes. Today’s world, whether we like it or not, is the work of Hitler. Without Hitler there would have been no partition of Germany and Europe; without Hitler there would be no Americans and no Russians in Berlin; without Hitler there would be no Israel; without Hitler there would be no de-colonization, at least not such a rapid one; there would be no Asian, Arab or Black African emancipation, and no diminution of European preeminence. Or, more accurately, there would be none of this without Hitler’s mistakes. He certainly did not want any of it.

(The Meaning of Hitler, Harvard University Press, 1979, page 100)

No-one has yet captured how the nightmarish feeling of 2025 is itself downstream from the preceding era.

Kierkegaard and Existence

There are various striking intuitions about human existence. For example, in his brilliant memoirs, Speak, Memory, Nabokov begins with the deep reflection where human existence is compared to a baby in a cradle, rocking, completely vulnerable and uncertain. All of this is bracketed by two episodes of infinite darkness. The first episode took place before you were born and the second takes place after you’re gone. Your existence is a temporary flame, like that of a lit match.

A MetaIntelligent comment on this would be that the profound ingenuity of the 19th century mathematicians analyzing the size and nature of infinity (e.g., Richard Dedekind or Georg Cantor) cannot in the last analysis wrestle down human existence into mathematics.

The modern progenitor of this kind of human existence-watching is the Danish genius Søren Kierkegaard. In one of his masterpieces, Concluding Unscientific Postscript to Philosophical Fragments (1846), he makes the claim that knowledge, theory, speculative thinking and infinity-watching à la Dedekind and Cantor, cannot possibly explain human existence, because it subsumes all of these.

In 2025, this would mean that the Kierkegaard sense of things would tell you that neuroscience can never really explain how existence is sensed by a living person.

Kierkegaard writes, “in my view the misfortune of the age was precisely that it had too much knowledge, had forgotten what existence means, and what inwardness signifies.” He continues, “for a knowledge-seeker, when he has finished studying China he can take up Persia; when he has studied French he can begin Italian; and then go on to astronomy, the veterinary sciences, and so forth, and always be sure of a reputation as a tremendous fellow.”

By way of contrast, “inwardness in love does not consist in consummating seven marriages with Danish maidens, then cutting loose on the French, the Italian, and so forth, but consists in loving one and the same woman, and yet being constantly renewed in the same love, making it always new in the luxuriant flowering of the mood.” (Concluding Unscientific Postscript to Philosophical Fragments, page 232.)

Kierkegaard’s kind of existence-watching can be understood as a turning-upside-down of the famous phrase from Descartes, “I think, therefore I am.” For Kierkegaard, “I am, therefore I think.” Notice that “I think” is an epistemological statement or knowledge-watching. “I am” is an ontological statement.

This existentialist tradition of putting ontology before epistemology finds its culmination in Heidegger. As he says in his opus, Being and Time (1927), “human being is ultimately the being for whom being itself is an issue.”

China: Deep History

Winston Churchill says somewhere (if we paraphrase) that the further back you are able to look, the more secure your ability to analyze the present and the future. Without these ‘historical smarts’, your sense of direction is very feeble. Let us use the novel, Lost Illusions, by Honoré de Balzac as a back door into historical smarts.

This novel was originally published in three parts between 1837 and 1843 and is set mostly in the 1820s, primarily in provincial France. It is unique because it starts with technology and commerce.

At the time when this story begins, the Stanhope press and inking-rollers were not yet in use in small provincial printing-offices. Angoulême, although its paper-making industry kept it in contact with Parisian printing, was still using those wooden presses from which the now obsolete metaphor ‘making the presses groan’ originated. Printing there was so much behind the times that the pressmen still used leather balls spread with ink to dab on the characters. The bed of the press holding the letter-filled ‘forme’ to which the paper is applied was still made of stone and so justified its name ‘marble’. The ravenous machines of our times have so completely superseded this mechanism — to which, despite its imperfections, we owe the fine books produced by the Elzevirs, the Plantins, the Aldi and the Didots — that it is necessary to mention this antiquated equipment which Jérôme-Nicolas Séchard held in superstitious affection; it has its part to play in this great and trivial story.

Not only do we get this conceptual framework about printing technology, but later on in the novel, Balzac gives us a further insight into paper-making and textiles, including a long discussion of China.

In England, where four-fifths of the population use cotton to the exclusion of linen, they make nothing but cotton paper. The cotton paper is very soft and easily creased to begin with, and it has a further defect: it is so soluble that if you seep a book made of cotton paper in water for fifteen minutes, it turns to a pulp, while an old book left in water for a couple of hours is not spoilt. You could dry the old book, and the pages, though yellow and faded, would still be legible, the work would not be destroyed.

“There is a time coming when legislation will equalize our fortunes, and we shall all be poor together; we shall want our linen and our books to be cheap, just as people are beginning to prefer small pictures because they have not wall space enough for large ones. Well, the shirts and the books will not last, that is all; it is the same on all sides, solidity is drying out. So this problem is one of the first importance for literature, science, and politics.

“One day, in my office, there was a hot discussion going on about the material that the Chinese use for making paper. Their paper is far better than ours, because the raw material is better; and a good deal was said about this thin, light Chinese paper, for if it is light and thin, the texture is close, there are no transparent spots in it. In Paris there are learned men among the printers’ readers; Fourier and Pierre Leroux are Lachevardiere’s readers at this moment; and the Comte de Saint-Simon, who happened to be correcting proofs for us, came in in the middle of the discussion. He told us at once that, according to Kempfer and du Halde, the Broussonetia furnishes the substance of the Chinese paper; it is a vegetable substance (like linen or cotton for that matter). Another reader maintained that Chinese paper was principally made of an animal substance, to wit, the silk that is abundant there. They made a bet about it in my presence. The Messieurs Didot are printers to the Institute, so naturally they referred the question to that learned body. M. Marcel, who used to be superintendent of the Royal Printing Establishment, was umpire, and he sent the two readers to M. l’Abbe Grozier, Librarian at the Arsenal. By the Abbe’s decision they both lost their wages. The paper was not made of silk nor yet from the Broussonetia; the pulp proved to be the triturated fibre of some kind of bamboo. The Abbe Grozier had a Chinese book, an iconographical and technological work, with a great many pictures in it, illustrating all the different processes of paper-making, and he showed us a picture of the workshop with the bamboo stalks lying in a heap in the corner; it was extremely well drawn.

“Lucien told me that your father, with the intuition of a man of talent, had a glimmering of a notion of some way of replacing linen rags with an exceedingly common vegetable product, not previously manufactured, but taken direct from the soil, as the Chinese use vegetable fibre at first hand. I have classified the guesses made by those who came before me, and have begun to study the question. The bamboo is a kind of reed; naturally I began to think of the reeds that grow here in France.

“Labor is very cheap in China, where a workman earns three halfpence a day, and this cheapness of labor enables the Chinese to manipulate each sheet of paper separately. They take it out of the mould, and press it between heated tablets of white porcelain, that is the secret of the surface and consistence, the lightness and satin smoothness of the best paper in the world. Well, here in Europe the work must be done by machinery; machinery must take the place of cheap Chinese labor. If we could but succeed in making a cheap paper of as good a quality, the weight and thickness of printed books would be reduced by more than one-half. A set of Voltaire, printed on our woven paper and bound, weighs about two hundred and fifty pounds; it would only weigh fifty if we used Chinese paper. That surely would be a triumph…

In 2025, we are to some extent, back to China, going from the proto-industrial world to our industrial and even digital world.

To educate oneself on all of this, you should look at the supreme scholarly achievement of the 20th century, namely Professor Joseph Needham’s masterpiece, Science and Civilisation in China.

India: Deep History

In his lectures, Professor Amartya Sen, the Harvard Nobel Prize in Economics winner, mentions Sir Mortimer Wheeler, Director-General of the Archaeological Survey of India. Wheeler wrote, while reporting on the excavation of the Indus Valley Civilization (of India), that the plumbing and sewerage were advanced, in some ways surpassing modern equivalents.

Sen’s larger point is that history is characterized by phases of rise and fall and not just classes and class struggles à la Marx.

Consider the following depiction of the East India Company, from The Anarchy: The Relentless Rise of the East India Company (also subtitled The East India Company, Corporate Violence, and the Pillage of an Empire) by William Dalrymple.

On 28 August 1608, Captain William Hawkins, a bluff sea captain with the Third Voyage, anchored his ship, the Hector, off Surat, and so became the first commander of an EIC vessel to set foot on Indian soil.

India then had a population of 150 million — about a fifth of the world’s total — and was producing about a quarter of global manufacturing; indeed, in many ways it was the world’s industrial powerhouse and the world’s leader in manufactured textiles. Not for nothing are so many English words connected with weaving — chintz, calico, shawl, pyjamas, khaki, dungarees, cummerbund, taffetas — of Indian origin. It was certainly responsible for a much larger share of world trade than any comparable zone and the weight of its economic power even reached Mexico, whose textile manufacture suffered a crisis of ‘de-industrialisation’ due to Indian cloth imports. In comparison, England then had just 5 per cent of India’s population and was producing just under 3 per cent of the world’s manufactured goods. A good proportion of the profits on this found its way to the Mughal exchequer in Agra, making the Mughal Emperor, with an income of around £100 million,* by far the richest monarch in the world.

The Mughal capitals were the megacities of their day: ‘They are second to none either in Asia or in Europe,’ thought the Jesuit Fr Antonio Monserrate, ‘with regards either to size, population, or wealth. Their cities are crowded with merchants, who gather from all over Asia. There is no art or craft which is not practised there.’ Between 1586 and 1605, European silver flowed into the Mughal heartland at the astonishing rate of 18 metric tons a year, for as William Hawkins observed, all nations bring coyne and carry away commodities for the same’. For their grubby contemporaries in the West, stumbling around in their codpieces, the silk-clad Mughals, dripping in jewels, were the living embodiment of wealth and power — a meaning that has remained impregnated in the word ‘mogul’ ever since.

By the early seventeenth century, Europeans had become used to easy military victories over the other peoples of the world.

* Over £10,000 million today.

Think of the larger point: what you just read is the story of Indian de-industrialization and its negative results. Ask yourself whether American de-industrialization is something of an echo of this, as manufacturing is offshored.

Heidegger vs. Marx as World Watchers

Marx (1818-1883) implies that the foundation of human reality is econo-technical, and on that basis society creates thoughts and philosophies, art and poems. This explanation seems appealing when we think of the economic development of China in our time, for example, or the rise of computers and software.

In a way, Heidegger (1889-1976) turns this upside down. At the basis of world history is society producing culture. You can make a simple “cartoon” and say that for Marx, economics shapes everything, and for Heidegger culture replaces economics.

For example, in his book, What Is Called Thinking? (English translation, 1968, Harper & Row), Heidegger argues the foundation of all Western thinking and culture comes from axioms such as logos [Ancient Greek: λόγος] (from which we have logic, cosmology, psychology, epistemology, etc.), as well as legein (the Greek verb λέγειν, “to speak”).

Heidegger states (on page 204), “Without the λέγειν of that logic, modern man would have to make do without his automobile. There would be no airplanes, no turbines, no Atomic Energy Commission.”

Our MI comment on this is that any monocausal explanation of how mankind went from Neanderthal to the Manhattan skyline is completely inadequate. You must create a “double-helix” of Marx and Heidegger, adding the dimensions of surprise and unintended consequences. Without the physics concepts of emergence and complexity, we have no possibility of understanding how we got to now. In the site tagline, we use the word “composite” as a reference to this kind of deeper understanding.

Economics-Watching: From Code to Cash: How Programmable Payments Are Shaping the Future of Finance

[from the Federal Reserve Bank of Atlanta, by Chris Colson, payments expert]

When I was first introduced to computers, programming languages like COBOL, Fortran, and Pascal were standard. None of them were particularly user-friendly, especially for someone like me who isn’t a natural coder. Over time, new languages and tools appeared, making programming more accessible.

Today, we have low-code and no-code platforms [related YouTube video] that allow people with little to no coding experience to build apps. Just as programming has become easier, payments are becoming programmable, offering automation, simplicity, and flexibility.

Programmable payments are automated transactions that occur when specific conditions or events are met. Unlike traditional payment methods, which can rely on manual approvals or fixed schedules (think monthly software transactions), programmable payments offer a more dynamic approach. For instance, a programmable payment might only occur when a product is delivered or a service is completed.

Two key technologies power programmable payments: smart contracts and application programming interfaces (APIs). Smart contracts are self-executing digital agreements that run on blockchain and automatically release payments once specified conditions are met. APIs allow different systems to communicate, which enables the automation of payment processes across platforms. For example, a business might set up an API process that triggers a payment and then marks the invoice as “paid” in its accounting software.

The biggest advantage of programmable payments is automation. By automating transactions, businesses can eliminate repetitive tasks like payroll or vendor payments, reducing the time spent on manual processes while also minimizing the risk of human error. Automation can also help businesses save money, as they may no longer need intermediaries like banks or payment processors to facilitate transactions. Blockchain-based smart contracts can bypass the need for banks to verify payments, resulting in faster, cheaper transactions.

Transparency and security are other significant advantages, particularly when programmable payments are powered by blockchain. Each transaction is recorded on a decentralized ledger, providing a clear, auditable trail of activity. This can help reduce the risk of fraud and create a more secure system for managing payments.

The potential of programmable payments goes beyond automating individual transactions. For supply chain management, payments that are automatically triggered upon delivery of goods can reduce the need for manual verification, and thus improve operational efficiency. In decentralized finance, programmable payments can streamline processes like loan repayments and insurance payouts, improving speed and transparency.

As the Internet of Things expands, integrating programmable payments could allow devices to handle payments autonomously. Imagine a car that automatically pays for tolls or parking, or a smart refrigerator that orders and pays for groceries when supplies run low. The possibilities for real-time, automated payments between connected devices are enormous.

Despite all the potential, programmable payments face challenges. The technology—particularly blockchain-based systems—can be complex and requires specialized expertise, which can increase upfront costs for businesses. In addition, the regulatory environment around programmable payments is still evolving, especially for cross-border transactions. This creates uncertainty for businesses.

Much like low-code and no-code platforms make app development accessible to non-coders, programmable payments are moving toward a future with minimal human intervention. Both are about simplifying complex systems: low-code/no-code platforms hide the complexity of software development, while programmable payments automate financial processes with predefined logic.

Both point to a future where systems execute tasks on their own, based on rules set by users. The goal is simple: Once the conditions are established, the system handles the rest.

Programmable payments are reshaping the future of finance. It’s an exciting future that promises smarter and more streamlined and efficient financial operations.

Economics-Watching: Remittances in Times of Uncertainty: Understanding the Dynamics and Implications

[from the International Monetary Fund, by Patrick A. Imam, Kangni R Kpodar, Djoulassi K. Oloufade, Vigninou Gammadigbe]

This paper delves into the intricate relationship between uncertainty and remittance flows. The prevailing focus has been on tangible risk factors like exchange rate volatility and economic downturn, overshadowing the potential impact of uncertainty on remittance dynamics. Leveraging a new dataset of quarterly remittances combined with uncertainty indicators across 77 developing countries from 1999 Q1 to 2019 Q4, the analysis highlights that uncertainty in remittance-sending countries negatively affects remittance flows. In contrast, uncertainty in remittance receiving-countries has a more complex, dual effect. In countries with high private investment ratios, rising domestic uncertainty leads to a decline in remittances. Conversely, in countries with low public spending on education and health, remittances increase in response to uncertainty, serving as a social safety net. The paper underscores the heterogeneous and non-linear effects of domestic uncertainty on remittance flows.

Read the paper [archived PDF].

Economics-Watching: Kuwait’s Banking Sector Posts Solid Credit Growth in October

[from NBK Group’s Economic Research Department, 21 November, 2024]

Kuwait: Solid credit growth in October driven by household credit. Domestic credit increased by a solid 0.4% in October, driving up YTD growth to 2.9% (3.2% y/y). The recovery in household credit continued, with growth in October at a solid 0.5%, resulting in a YTD increase of 2.4%. While y/y growth in household credit remains a limited 2.3%, annualized growth over the past four months is a stronger 4.7%. Business credit inched up by 0.2% in October, pushing YTD growth to 3.6% (2.9% y/y). Industry and trade drove business credit growth in October while construction and trade are the fastest growing YTD at 17% and 8%, respectively. In contrast, the oil/gas sector continued its downtrend, deepening the YTD decrease to 13%. Excluding the oil/gas sector, growth in business credit would increase to a relatively good 5% YTD. Looking ahead, the last couple of months of the year (especially December) are usually the weakest for business credit, likely due to increased repayments and write-offs, but it will not be surprising if the recovery in household credit is generally sustained, especially given the commencement of the interest rate-cutting cycle. Meanwhile, driven by a plunge in the volatile public-institution deposits, resident deposits decreased in October, resulting in YTD growth of 2.4% (4.2% y/y). Private-sector deposits inched up in October driving up YTD growth to 4.5% compared with 10% for government deposits while public-institution deposits are a big drag (-14%). Within private-sector KD deposits, CASA showed further signs of stabilization as there was no decrease for the third straight month while the YTD drawdown is a limited 1%.

Chart 1: Kuwait credit growth

(% y/y)

Chart 2: UK inflation

(%)

Egypt: IMF concludes mission for fourth review, sees external risks. The IMF concluded its visit to Egypt after spending close to 2 weeks, holding several in-person meetings with the Egyptian authorities, private sector, and other stakeholders. The IMF released a statement mentioning that the current ongoing geopolitical tensions in the region in addition to an increasing number of refugees have affected the external sector (Suez Canal receipts down by 70%) and put severe pressure on the fiscal front. The Fund acknowledged the Central Bank of Egypt’s commitment to unify the exchange rate, maintain the flexible exchange rate regime, and keep inflation on a firm downward trend over the medium term by substantially tightening monetary policy. It also highlighted that continued policy discipline was also a key to containing fiscal risks, especially those related to the energy sector. The Fund, as always, re-iterated the need for promoting the private sector mainly through an enhanced tax system and accelerating divestment plans of the state firms. Finally, it also said that the discussions would continue over the coming days to finalize the agreement on the remaining policies and reform plans. However, the release did not provide any clear hints about the conclusion on the government’s earlier request to push the timeline of some of the subsidy moves.

Oman: IMF completes article IV with a strong outlook for the economy in 2025. Oman’s economy continued to expand with growth reaching 1.9% in the first half of 2024 (versus 1.2% in 2023), despite being weighed down by OPEC+ mandated oil production cuts as non-oil GDP grew a stronger 3.8% y/y in H1 (versus 1.8% in 2023). The fiscal and current account balances remain in a comfortable situation evident by a decline in public sector debt and the recent rating upgrade to investment grade. The Fund expects Oman’s economic growth to see a strong rebound in 2025, supported by higher oil production. It also believes that fiscal and current account balances will remain in surplus but at lower levels. Key risks to the outlook stem from oil price volatility and intensifying geopolitical tensions. The IMF also mentioned that further efforts are needed to raise nonhydrocarbon revenues through more tax policy measures and the phasing out of untargeted subsidies which should help in freeing up resources to finance growth under the government’s diversification agenda.

UK: Inflation rises more than forecast, reinforcing BoE’s caution on rate cuts. UK CPI inflation increased to 2.3% y/y in October from 1.7% the previous month, slightly above the market and the Bank of England’s forecast of 2.2%. On a monthly basis too, inflation rose to 0.6%, a seven-month high, from September’s no change. The steep rise was mainly driven by an almost 10% rise in the household energy price cap effective from October. Core inflation also accelerated to 3.3% y/y (0.4% m/m) from 3.2% (0.1% m/m). While goods prices continued to fall (-0.3% y/y), service prices rose at a faster rate of 5% from 4.9%. Recently, the Bank of England had cautioned about inflation quickening next year (projecting a peak rate of 2.8% in Q3 2025), citing the impact of higher insurance contributions and rising minimum wages as outlined in the latest government budget. Therefore, with inflation rising above forecast, the bank will likely slow the pace of monetary easing after delivering two interest rate cuts of 25 bps earlier, with markets now seeing only two additional cuts by the end of 2025.

Eurozone: ECB warns of fiscal and growth risks in its latest Financial Stability Review [archived PDF]. In its most recent Financial Stability Review (November) [archived PDF], the European Central Bank warned that elevated debt and fiscal deficit levels and anemic long-term growth could expose sovereign debt vulnerabilities in the region, stoking concerns of a repeat of the 2011 sovereign debt crisis. Maturing debt being rolled over at much higher borrowing rates raising debt service costs poses risks to countries with little fiscal space and leaves certain governments exposed to market fluctuations. The bank also emphasized the risks of high equity valuations, low liquidity and a greater concentration of exposure among non-banks. Moreover, it sees current geopolitical uncertainties and the possibility of more trade tensions as heightening risks. The Eurozone’s current government debt-to-GDP ratio stands at 88%, but the underlying data suggest a much more precarious situation with Greece, Italy, and France’s ratios at 164%, 137% and 112%. Recently, concerns about France’s high fiscal deficit (around 5.9% of GDP) and elevated debt levels saw yields on the country’s bonds rise steeply, widening the spread gap with German bonds to the highest level in over a decade.

Stock markets	Index	Daily Change (%)	YTD Change (%)
Regional
Abu Dhabi (ADI)	9,405	-0.23	-1.80
Bahrain (ASI)	2,043	-0.37	3.62
Dubai (DFMGI)	4,761	0.61	17.26
Egypt (EGX 30)	30,588	-0.33	23.18
GCC (S&P GCC 40)	709	0.09	-0.52
Kuwait (All Share)	7,353	-0.08	7.86
KSA (TASI)	11,868	-0.07	-0.83
Oman (MSM 30)	4,609	0.00	2.10
Qatar (QE Index)	10,438	0.12	-3.62
International
CSI 300	3,986	0.22	16.17
DAX	19,005	-0.29	13.45
DJIA	43,408	0.32	15.17
Eurostoxx 50	4,730	-0.45	4.60
FTSE 100	8,085	-0.17	4.55
Nikkei 225	38,352	-0.16	14.61
S&P 500	5,917	0.00	24.05

3m interbank rates	%	Daily Change (bps)	YTD Change (bps)
Bahrain	5.86	-1.29	-66.34
Kuwait	3.94	0.00	-37.50
Qatar	6.00	0.00	-25.00
UAE	4.43	3.81	-89.96
Saudi	5.50	-4.75	-73.14
SOFR	4.52	-0.09	-81.13

Bond yields	%	Daily Change (bps)	YTD Change (bps)
Regional
Abu Dhabi 2027	4.66	5.00	33.9
Oman 2027	5.49	6.00	33.0
Qatar 2026	4.68	6.00	16.1
Kuwait 2027	4.69	3.00	35.0
Saudi 2028	4.96	1.00	43.9
International 10-year
US Treasury	4.41	1.77	55.3
German Bund	2.34	0.35	31.2
UK Gilt	4.47	2.60	93.0
Japanese Gov’t Bond	1.07	1.0	45.4

Exchange rates	Rate	Daily Change (%)	YTD Change (%)
KWD per USD	0.31	0.04	-0.05
KWD per EUR	0.32	-0.46	-1.98
USD per EUR	1.05	-0.49	-4.47
JPY per USD	155.43	0.50	10.19
USD per GBP	1.27	-0.25	-0.62
EGP per USD	49.67	0.34	61.00

Commodities	$/unit	Daily Change (%)	YTD Change (%)
Brent crude	72.81	-0.68	-5.49
KEC	73.78	0.74	-7.26
WTI	68.87	-0.75	-3.88
Gold	2,648.2	0.80	28.40

Disclaimer: While every care has been taken in preparing this publication, National Bank of Kuwait accepts no liability whatsoever for any direct or consequential losses arising from its use. Daily Economic Update is distributed on a complimentary and discretionary basis to NBK clients and associates. This report and previous issues can be found in the “News & Insight / Economic Reports” section of the National Bank of Kuwait’s web site. Please visit their web site, nbk.com, for other bank publications.