The party is over for GCC growth, but the music plays on
The MENA region has to adjust to lower oil prices while providing adequate stimulus to support domestic economies taking a hit from COVID-19. This means lower growth and larger fiscal deficits.
Saudi Arabia’s stimulus package makes up 4% of GDP and is equivalent to 13% of the 2020 budget. This will erode the kingdom’s fiscal balance further, prompting it to issue more debt.
The UAE’s stimulus package -- which is equivalent to about 16% of GDP -- should start yielding fruit from the second half of the year, but the economy will have to reinvent itself once again, over a multi-quarter U- shaped recovery
Florence Eid-Oakden, Ph.D, Chief Economist
Charlene Rahall, Senior Analyst
Leila Lajevardi & Nancy Bou Dakka, Analysts
The Regional Views series are thematic papers aimed at identifying and analysing factors behind medium to long-term economic trends shaping the region. Our analysis draws conclusions that help businesses and investors get ahead of the curve. As a firm staffed by Middle Easterners, we focus on insight rather than standard analysis.
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