The European Union is prepared to engage in a constructive dialogue with the United States while maintaining a firm stance against any unfair or arbitrary targeting, European Commission President Ursula von der Leyen stated at a press conference following the informal European Council meeting in Brussels. The summit, which focused on defense and transatlantic relations, underscored the EU’s commitment to cooperation but also its readiness to act if necessary.

Strengthening Transatlantic Cooperation

Addressing reporters, von der Leyen stressed that transatlantic cooperation remains a high priority, especially in the face of evolving geopolitical uncertainties. “We all know that much is at stake,” she remarked, emphasizing the need for a pragmatic and realistic partnership with Washington.

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“We discussed how to strengthen a very realistic cooperation with the US,” she noted, adding that the EU remains open to dialogue but is also prepared for potential challenges in its relationship with Washington.

“If the EU is targeted unfairly or arbitrarily, we will respond decisively,” she affirmed, signaling a firm stance against any economic or political measures that could disproportionately impact Europe.

Concerns Over US Tariffs

Von der Leyen also addressed US trade policies, particularly tariffs imposed on Mexico, Canada, and China. She criticized these measures, stating that “nothing positive comes out of this.”

“Tariffs increase business costs, harm workers and consumers, create unnecessary disruptions in the economy, and drive up inflation,” she explained, highlighting the potential negative ripple effects on global trade.

The EU’s Strategy Moving Forward

Despite potential tensions, the European Commission President reaffirmed the EU’s commitment to “productive discussions” with the US, stressing that dialogue must be conducted “in a timely manner.”

At the same time, von der Leyen emphasized the need for Europe to focus on its own economic resilience. “We have to do our job and focus on our own challenges—boosting and improving our competitiveness,” she stated, reinforcing the EU’s strategy of strengthening internal economic foundations while navigating external uncertainties.The message from Brussels is clear: the EU remains committed to collaboration with the US but will not hesitate to defend its interests if necessary. As global economic and political landscapes continue to shift, the strength of transatlantic relations will be tested in the months ahead.

The European Central Bank (ECB) and the Federal Reserve (Fed) are taking different approaches to interest rate cuts in 2025 as their economies follow distinct paths. While the Eurozone faces sluggish growth, prompting the ECB to ease monetary policy, the Fed remains cautious due to a resilient U.S. economy and ongoing trade policy uncertainties.

Fed Holds Rates Amid Policy Uncertainty

The Fed maintained its policy rate at 4.25%-4.50%, marking its first pause since it began cutting rates last year. The decision reflects the central bank’s careful approach amid complex economic conditions.

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A key change in the Fed’s statement was its upgraded assessment of the labor market, now seen as “stabilized.” Inflation was described as “somewhat elevated,” though Chair Jerome Powell downplayed this revision. Powell emphasized that the Fed is not in a rush to cut rates but remains open to adjustments based on labor and inflation data. However, he avoided addressing questions on tariffs, which remain a major inflationary wildcard.

Markets reacted with mixed signals, balancing the Fed’s official stance with Powell’s more dovish tone. The Fed’s next steps depend on how trade policies evolve under the new administration, particularly as tariffs and tighter immigration policies could keep inflation elevated.

ECB Cuts Rates To Support Growth

In contrast, the ECB reduced its key policy rate by 25 basis points to 2.75%, reaffirming its data-driven approach while signaling further rate cuts. The bank aims to reach its estimated neutral rate of 2%, though weak economic indicators suggest it may need to ease further.

Recent data supports this stance:

• Q4 GDP growth stagnated at 0.0%, missing the ECB’s 0.2% projection.
• Headline and core inflation ended Q4 lower than expected, though ECB President Christine Lagarde noted lingering wage and supply chain pressures.
• The Bank Lending Survey showed tightening credit conditions, reflecting banks’ growing risk concerns.

Looking ahead, the ECB is expected to continue cutting rates aggressively until reaching 2%, then shift to a more gradual pace. Some analysts predict a further drop to 1.5% by year-end if trade tensions persist.

Both central banks’ policies hinge on global trade developments. The Fed remains cautious, awaiting clarity on President Trump’s tariff strategy, which could drive inflation and supply chain disruptions. Meanwhile, the ECB’s easing cycle may be influenced by trade frictions affecting European exports and business sentiment.

As trade policies unfold, the Fed and ECB remain on diverging paths—one in wait-and-see mode, the other pushing ahead with rate cuts.

The retail sector in Cyprus continued its upward trajectory in 2024, with both turnover value and volume registering solid gains. According to the latest data from CySTAT, the Turnover Value Index of Retail Trade for December 2024 increased by 5.8% compared to the same month in 2023, reflecting a strong performance during the crucial holiday shopping season.

At the same time, the Turnover Volume Index of Retail Trade—which measures the actual quantity of goods sold—grew by 3.6% year-over-year, signaling sustained consumer demand despite economic fluctuations.

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Full-Year Performance: Consistent Growth In Value And Volume

For the entire January-December 2024 period, the Value Index recorded an estimated 5.4% increase compared to 2023, while the Volume Index rose by 4.3%. These figures suggest a healthy expansion in the country’s retail sector, supported by steady consumer spending and an improving economic landscape.

December’s growth aligns with broader annual trends, reinforcing the resilience of Cyprus’ retail market. While rising costs and global economic uncertainties have impacted various sectors, retail businesses in Cyprus have maintained a strong performance, benefiting from increased purchasing power and evolving consumer habits.

As 2025 unfolds, the sector’s ability to sustain this momentum will depend on factors such as inflation trends, wage growth, and broader economic stability. For now, Cyprus’ retail industry remains on solid footing, demonstrating consistent expansion across both value and volume metrics.

Card payments have solidified their position as the preferred method of cashless transactions in Cyprus, significantly surpassing the euro area average, according to the latest data from the Central Bank of Cyprus (CBC). The bank’s Payment Statistics report for the first half of 2024 underscores the growing reliance on payment cards for everyday transactions across the island.

Cyprus Leads In Card Payment Adoption

In terms of transaction volume, card payments accounted for an impressive 73% of non-cash payments in Cyprus, compared to the 56% average in the euro area. This widespread adoption highlights the country’s shift toward digital payments, making it the most commonly used payment method.

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However, when measured by transaction value, credit transfers dominated, representing 81% of the total non-cash payment value in Cyprus. Cheques followed in second place, accounting for 8% of transaction value, reaffirming their continued relevance in high-value financial transactions.

Spending Trends: Small Purchases On Cards, Big Transactions Via Transfers

While card payments were the most frequently used method, their average transaction value stood at €62, reflecting their role in everyday purchases. In contrast, credit transfers averaged €4,038 per transaction, while cheques had an average value of €3,498—notably, more than three times higher than the euro area’s average of €1,129.

Interestingly, Cypriots demonstrated a strong preference for making high-value card transactions remotely, rather than in-store. The average value per online card payment using Cyprus-issued cards reached €119, one of the highest figures in the euro area.

Contactless Payments And Financial Services Expansion

Cyprus has also embraced contactless technology at an accelerated pace. Over 75% of ATMs in the country now support contactless withdrawals, significantly ahead of the 30% average across the euro area. This adoption reflects a broader shift towards seamless, digital-first payment experiences.

Meanwhile, the number of licensed payment and electronic money institutions in Cyprus continues to rise, reaching 38 as of mid-2024. This upward trend positions Cyprus among the euro area’s leaders in financial services density per capita, reinforcing its role as a regional hub for fintech and digital payments.

With card payments continuing to gain traction and a robust financial services ecosystem in place, Cyprus is poised to maintain its leadership in digital payments and cashless transactions well into the future.

Fitch Ratings has affirmed Saudi Arabia’s credit rating at A+ with a stable outlook, attributing this to the Kingdom’s strong fiscal and external balance sheets.

Saudi Arabia’s Credit Rating

Fitch highlighted Saudi Arabia’s robust government debt/GDP ratio and sovereign net foreign assets (SNFA), which are significantly stronger than the ‘A’ and ‘AA’ medians. The agency also emphasized Saudi Arabia’s fiscal buffers, including deposits and other public-sector assets.

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While acknowledging improvements in oil dependence, governance indicators, and vulnerability to geopolitical risks, Fitch noted these remain relative weaknesses. The agency also praised the wide-reaching social and economic reforms under Vision 2030, which are helping diversify the Kingdom’s economy.

Fitch forecasts that Saudi Arabia’s SNFA will reach 63.7% of GDP in 2024-2025, well above the ‘A’ median of 8.7%. The agency noted that fiscal reforms aimed at reducing oil price volatility’s impact could further enhance the Kingdom’s rating. Fitch also expects strong growth in non-oil exports, particularly in the travel sector, which will contribute to reducing the services balance deficit.

Saudi Economy

Saudi Arabia’s economy grew by 1.3% in 2024, largely driven by a 4.3% rise in non-oil activities and a 2.6% increase in government activities, according to the General Authority for Statistics (GASTAT). However, the oil sector contracted by 4.5%.

In Q4 2024, real GDP growth surged to 4.4% year-on-year, the highest quarterly growth in two years. Non-oil activities led this growth, with a 4.6% rise, while the oil sector grew by 3.4%. Government activities increased by 2.2%.

The non-oil private sector showed strong growth in December, supported by domestic demand and a surge in exports, despite a slight moderation in overall growth. The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) dropped to 58.4 in December from a 17-month high of 59 in November, signaling continued expansion.

Outlook and Inflation

Saudi Arabia has revised its GDP growth forecast for 2025 to 4.6%, down from 5.7%, with the 2026 forecast lowered to 3.5%. Inflation in 2024 remained between 1.5% and 2%, largely driven by rising housing rents, and is expected to stabilize at around 2% in the medium term, according to the IMF.

Cairo-based venture capital firm Foundation Ventures has successfully raised $25 million for its second fund, FVFII, aimed at supporting early and growth-stage startups in Egypt.

Key Highlights

The new fund has attracted key investors such as the Egyptian American Enterprise Fund (EAEF), the Micro, Small, and Medium Enterprise Development Agency (MSMEDA), and businessman Onsi Sawiris.

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FVFII targets early- and growth-stage Egyptian startups with plans for regional and global expansion. While the primary focus is on Egypt, the fund will also allocate capital to high-potential startups across Africa. It plans to invest in ventures with initial ticket sizes ranging from $750,000 to $1 million.

The fund’s strategy is theme-driven, rather than sector-specific, ensuring flexibility in investment decisions while maintaining a primary focus on the Egyptian market and secondary opportunities in Africa.

Foundation Ventures’ Growth

Foundation Ventures launched its first fund, FVF1 Vintage, in 2019. The firm is led by Mazen Nadim, managing partner, with partners Omar Barakat and Ziyad Hamdy. The company also has a strategic partnership with HOF, a US-based VC firm managing over $1.5 billion in assets under management, serving as a General Partner.

The firm’s portfolio includes promising startups such as Rabbit, Flextock, Swypex, Aydi, Trella, and Abwaab.

Opportunities In Egypt’s Startup Landscape

Nadim noted that Egypt’s devalued currency offers a unique opportunity for startups to leverage the country’s skilled tech talent while positioning Egypt as a cost-efficient testing ground for new ventures.

In 2024, Egypt attracted $334 million across 84 deals, with the fintech sector leading with $237 million invested across 17 fintech startups, according to Wamda and Digital Digest. The logistics sector secured $23.5 million, while e-commerce raised $22.5 million.

Most of the capital came from local investors, with Saudi investors following closely behind. Notable recent investments include a $13 million funding round for Simplex, a CNC machine manufacturing startup, and $22 million raised by Paymob in a Series B extension round, bringing its total Series B funding to $72 million.

Sales of luxury homes in Dubai valued at over $10 million surged to a record 435 transactions in 2024, slightly surpassing the previous year’s total of 434, as reported by global property consultant Knight Frank.

Q4 Drives Record-Breaking Sales

The substantial growth in 2024 can be attributed to a robust performance in the final quarter, where 153 luxury homes were sold, setting a new record for quarterly sales.

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Palm Jumeirah remained the standout location for high-end property sales, accounting for 127 deals or 29% of the total. This area alone generated $2.3 billion in sales, making up 32.5% of the total value of Dubai’s luxury home market.

Other Key Luxury Areas

Palm Jebel Ali followed with 36 luxury property transactions in 2024, with the first homes in this area expected to be completed by 2027. In terms of transaction value, Emirates Hills secured second place, with sales totaling $514.5 million, or 7.3% of the market.

Jumeirah Bay Island, District One, and Dubai Hills Estate rounded out the top five locations, contributing 6.7%, 6.6%, and 6.2% to the luxury market, respectively.

Villa Demand Fuels Market Growth

Villas made up 68.5% of all luxury property sales in 2024, up from 52% in 2022 and 2023. This growth was primarily driven by increasing demand from international high-net-worth individuals.

More than half (52%) of luxury home sales took place in the primary market, with major developers such as Omniyat, Nakheel, and Emaar Properties accounting for 46% of these transactions.

A Slight Dip In High-End Listings

The report also revealed a 40% decrease in the number of homes listed above $10 million, with only 2,490 properties available in 2024, compared to 4,120 in 2023.

Faisal Durrani, Partner and Head of Research for MENA at Knight Frank, commented on Dubai’s growing appeal: “The city’s magnetic attraction is evident in its population growth, which reached over 3.8 million, increasing by 170,000 or 4.6% during 2024. This growth continues to fuel housing demand across all price ranges.”

Dubai Real Estate Market Performance

The Dubai Land Department recently reported that the emirate’s real estate sector achieved a total value of $207.2 billion (AED 761 billion) in 2024, marking a 20% year-on-year increase. The number of real estate deals reached a record 2.7 million, which includes sales and rental agreements, up 17% from the previous year.

Real estate transactions alone amounted to 226,000, reflecting a significant 36% rise compared to 2023.

Abu Dhabi’s Strong Growth

Meanwhile, Abu Dhabi’s real estate market also saw impressive growth in 2024, with transaction values rising by 10.5% to $26.2 billion (AED 96.2 billion). The number of transactions surged by 24.2% year-on-year to reach 28,249.

Leading Real Estate Players

Emaar Properties from Dubai and Aldar Properties from Abu Dhabi were the region’s top revenue-generating real estate companies, with Emaar reporting $6.5 billion and Aldar $4.5 billion for the first nine months of 2024.

This continued strong performance reflects a thriving luxury real estate market in the UAE, attracting international investors and contributing to the broader growth of the region’s economy.

The Middle East is undergoing a major transformation driven by Artificial Intelligence (AI). What once seemed like a futuristic concept is now a powerful force reshaping economies, industries, and daily life. As AI accelerates across the region, its potential to reshape sectors is becoming increasingly apparent.

IDC forecasts AI spending in the Middle East and Africa (MEA) to grow at an impressive compound annual growth rate of 29.7%, with the region expected to reach $6.4 billion by 2026. McKinsey’s estimates suggest AI could generate up to $150 billion in value for GCC countries, contributing more than 9% to their GDPs.

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To seize this opportunity, organizations across the region must act now, embracing AI and incorporating it into their operations to stay competitive and drive future growth.

A Region Ready For Change

Across the Middle East, governments are incorporating AI into their national strategies. The UAE, for instance, is a leader in AI adoption, with initiatives like the UAE National AI Strategy 2031 and Abu Dhabi’s Advanced Technology Research Council (ATRC) pushing AI research and innovation. These initiatives aim to make the UAE the world’s first fully AI-native government.

Saudi Arabia’s Vision 2030 and various AI projects in Abu Dhabi and Dubai are also redefining urban infrastructure and service delivery. These include autonomous transportation programs and AI-driven healthcare solutions. Such projects are transforming cities, making them smarter, more efficient, and more sustainable.

Transformative Potential For Organizations

AI’s real impact lies in its practical applications. For example, AI is being integrated into government services to enhance efficiency and improve customer experiences, transforming both public and private sector operations.

In addition, AI is helping various industries optimize their operations and customer engagement. With AI tools like chatbots, predictive analytics, and data-driven decision-making, companies are improving efficiency and driving new forms of value across sectors.

Overcoming Barriers To AI Adoption

Despite its promise, AI adoption presents several challenges. Organizations in the region often struggle with outdated infrastructure, inconsistent data, and a shortage of skilled AI professionals. To overcome these obstacles, businesses must invest in robust digital infrastructure and scalable AI solutions.

There is also a significant talent gap in the Middle East when it comes to AI. This underscores the importance of investing in education and training programs to cultivate local expertise and drive long-term innovation.

Moreover, data governance is key to ensuring that AI models work effectively. Proper data management is necessary to produce reliable, accurate results from AI systems.

Looking To The Future

As AI continues to advance, it is expected to become even more integrated into the region’s daily life over the next five years. Companies must align their AI strategies with their business goals to ensure sustainability and long-term success.

The Middle East is well-positioned to become a global leader in AI, with the UAE leading the charge. However, this requires collaboration among governments, businesses, and tech providers to foster inclusive growth that benefits all sectors.

IIn the world of artificial intelligence, the rise of DeepSeek is offering European companies a significant opportunity to level the playing field. Hemanth Mandapati, the CEO of the German startup Novo AI, was among the first to shift from OpenAI’s ChatGPT to the Chinese AI model, DeepSeek, just two weeks ago. Speaking at the GoWest conference in Gothenburg, Sweden, Mandapati explained how easy it was to migrate.

“If you’ve already built your app with OpenAI, migrating to other models is simple… it only takes us minutes,” Mandapati said in an interview.

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DeepSeek’s entry into the AI landscape is having a significant impact, particularly on pricing models. Interviews with startup leaders and investors reveal that the company’s affordable pricing structure is forcing competitors to reconsider their pricing and improve their models. According to Mandapati, DeepSeek’s pricing is five times lower than what competitors offer.

“DeepSeek offered pricing that was five times cheaper than competitors,” Mandapati explained. “I’m saving a lot of money, and users won’t notice any difference.”

European startups have long faced challenges in keeping pace with their American counterparts, primarily due to easier access to funding and resources. However, with DeepSeek’s cost-effective technology, European companies now have a chance to close the gap.

“This is a huge step toward democratizing AI and leveling the playing field with major tech giants,” said Seena Rejal, CEO of Netmind.AI, a UK-based company and one of DeepSeek’s early users.

Research from Bernstein analysts shows that DeepSeek’s pricing is 20 to 40 times lower than OpenAI’s. For example, OpenAI charges $2.50 for every $1 million in input tokens, while DeepSeek charges just 0.014 dollars for the same amount.

Despite the promising advantages, there are regulatory concerns. DeepSeek is under investigation in several European countries to determine whether it has copied data from OpenAI or if it is censoring responses to avoid negative portrayals of China.

A Shift In The AI Market

In 2024, the U.S. saw nearly $100 billion in venture capital investments in AI companies, while Europe only managed $15.8 billion, according to PitchBook data. Meanwhile, U.S. President Donald Trump recently unveiled Stargate, a $500 billion joint venture between OpenAI, SoftBank, and Oracle.

In Europe, investments in AI remain modest. However, some companies, like France’s Mistral, are managing to compete with the major players such as OpenAI, Meta, and Google. DeepSeek caught attention after it was revealed that the cost of training its DeepSeek-V3 model was less than $6 million using NVIDIA H800 computing power, making it one of the most affordable AI models to date.

“This shows that bigger isn’t always better,” said Fabrizio del Maffeo, CEO of Axelera AI. “As AI models become more accessible, costs fall, and barriers to innovation decrease, accelerating industry development.”

While some analysts question whether DeepSeek’s training costs are as low as reported, there’s no doubt that they are significantly cheaper than their U.S. counterparts. Ulrik R-T, CEO of Empatik AI, a Danish startup, sees DeepSeek as an opportunity for companies without large budgets.

“It proves we don’t need enormous budgets to realize our vision,” R-T said.

The Price War Begins

The shift in pricing has already triggered changes in the industry. Recently, Microsoft announced it would offer its OpenAI-powered logical reasoning model for free to Copilot users, a departure from its usual $20 per month subscription fee.

“AI prices are falling, so future solutions are likely to focus on more transparent, open-source models—even if they come from China,” said Joachim Schelde of Scale Capital.

However, larger corporations like Nokia and SAP are more cautious about these developments. According to Alexandru Voica, head of the corporate department at Synthesia, a UK-based company valued at $2.1 billion, price is just one factor.

“Other considerations include security certifications and software ecosystems that allow companies to integrate AI solutions into their platforms,” Voica added.

In a strategic move to further enhance its AI offerings, SoftBank Group, led by CEO Masayoshi Son, has partnered with OpenAI to launch a groundbreaking joint venture in Japan. The new venture, named SB OpenAI Japan, will serve corporate clients, providing cutting-edge artificial intelligence solutions. The collaboration will see OpenAI join forces with a company formed by SoftBank and its telecom arm to spearhead the venture.

As part of the deal, SoftBank is committing to pay $3 billion annually to integrate OpenAI’s AI technologies into its diverse group of companies. This partnership is a clear indication of SoftBank’s deeper investment in OpenAI, with reports suggesting the Japanese tech giant could pour anywhere between $15 billion to $25 billion into OpenAI over the coming years.

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In addition to the Japan-based venture, SoftBank is also dedicating $15 billion to Stargate, a separate project with OpenAI and Oracle designed to build AI infrastructure in the United States. This move comes as SoftBank looks to expand its footprint in AI, an area where its founder, Son, sees immense potential.

The launch of Stargate last month marked a noteworthy moment in Son’s career, with the CEO making his second public appearance alongside former U.S. President Donald Trump. While AI investments continue to pour in, China’s DeepSeek has introduced some uncertainty, raising questions about the billions invested in AI models that might soon rival those of U.S. giants.

“The world is going to need so much computing,” said Sam Altman, CEO of OpenAI, emphasizing the growing demand for AI capabilities.

Son’s reinvigorated backing of OpenAI reflects a significant shift for SoftBank, especially after a period of financial challenges that saw the value of its tech portfolio take a hit. With a long history of successful tech partnerships — such as bringing the iPhone to Japan in 2008 — Son’s renewed investment strategy signals his return to the global investment scene.

In a notable development, Son and Altman also met with Japanese Prime Minister Shigeru Ishiba earlier this week to discuss the partnership and its potential impact on Japan’s tech ecosystem.