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IMF: Gulf economies will shrink 7.6% this year

July 1, 2020 at 8:58 am

International Monetary Fund (IMF) [Flickr]

The economies of countries in the Gulf Cooperation Council (GCC) will shrink by 7.6 per cent this year following the coronavirus outbreak, the International Monetary Fund (IMF) announced yesterday.

“We expect the GCC economies to contract by 7.6% this year, the contraction will be across all sectors, oil and non-oil,” the Director of the IMF’s Middle East and Central Asia Department, Jihad Azour, said at a virtual economic forum.

Azour pointed out that the economies of oil-producing countries in other regions were “likely to see even larger drops.”

Economies of the Gulf countries have recently plunged following the outbreak of the COVID-19 pandemic, which has led to an acute drop in the global demand for crude oil and a slump in oil prices.

READ: UAE borrows $7bn to counter slumping oil prices

Gulf states are highly dependent on income from the oil industry but have also suffered as a result of lockdowns imposed to deal with the deadly outbreak which has forced airports to close and halted tourism.

The IMF said last week that the Saudi Arabian economy – the largest in the Arab world – was expected to contract by 6.8 per cent this year.