The party is over for GCC growth, but the music plays on

Regional Views
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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