Analysts in the poll, conducted between October 13 and 25, maintained their opinion that the region’s heavy reliance on hydrocarbons was causing it to be severely affected by the virus crisis. Corona Due to its impact on oil demand and prices.
New lockdown measures as infections continue to rise in the United States, Europe and elsewhere could spell an already declining economy in activity.
The gross domestic product of Saudi Arabia, the largest economy in the region, is expected to contract 5.1% in 2020 and then recover to 3.1% growth next year. A similar poll three months ago predicted that the Kingdom, the world’s largest oil exporter, would record a contraction of 5.2 in 2020.
“The region now faces difficult policy choices,” analysts at NBK wrote. “There is still a need for financial support to face the continuing and increasing casualties that are already appearing in Europe and the United States .. But from a medium-term perspective, governments should strive to achieve financial and external sector sustainability in light of the likely scenario of low oil prices.”
The gross domestic product of the United Arab Emirates is expected to contract 6% in 2020, grow by 2.7% in 2021 and 3.8% in 2022. Three months ago, expectations were for a contraction of 5.1% this year and 2.6% growth next year.
“This year, the UAE’s economy will suffer a deeper contraction than we expected in May,” the Institute of International Finance said.
The institute stressed that “Dubai’s economy may contract by at least 8%, more than Abu Dhabi, as its exposure to tourism, aviation and other services makes it more vulnerable to the repercussions of the pandemic,” adding that “production decreased 9% in the first half of the year and employment 10%.”
The average forecast for Kuwait’s economy was to shrink 6.3% in 2020, then record growth of 2.6% next year and 3.3% in 2022. Three months ago, expectations were for a contraction of 6.1% in 2020 and 2.5% growth next year.
Expectations for Qatar were unchanged for the current year with a 4% contraction, but growth expectations for next year improved to 3% from 2.8% three months ago. The economy is expected to grow by 3.4% in 2022.
The expectations for the Sultanate of Oman and Bahrain have worsened for the current year, and analysts expect the economy of the first to shrink 4.9% and the second by 4.8%, from 4.7 and 4.4%, respectively, in July.
Oman’s economy is expected to grow 2.5% next year, compared to an estimate of 3% in July, and rise to 2.7% in 2022. The growth forecast for Bahrain in the next year is unchanged at 2.6% and the economy is expected to grow 2.6% in 2022.
“The conditions are looking less favorable, especially for leisure and tourism,” said Maya Senussi, economist at Oxford Economics. “Visits are still prohibited for non-residents as the high season approaches,” she said, adding that analysts in general have a clearer view of the impact of the double shock on activity.
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