The International Monetary Fund (IMF) has revised its earlier projections of the real gross domestic product (GDP) for most of the Gulf nations.
The new outlook, an update to the previous predictions in June points at a worsening economic outlook for several emerging markets amid COVID-19.
The UN agency has now proposed better global economic circumstances by improving the earlier estimate of 5.2 percent contraction with 4.4 percent in its latest World Economic Outlook still citing it as the worst economic crisis since the 1930s Great Depression.
IMF has observed that oil-rich Gulf countries continue to bear the brunt of the double shock caused by the coronavirus crisis and the consequent lower demands at crude oil consumers resulting in lower fuel prices.
Except for Saudi Arabia which is expected to shrink lesser at 5.4 percent than its earlier projection of 6.8 percent, all other Gulf countries are forecasted to decline further than the previous levels.
Gulf’s second-largest economy UAE is expected to have an economic contraction at 6.6 percent compared to the IMF’s prior forecast of 3.5 percent.
Kuwait and Oman have the biggest revisions in their economic outlook with Oman now expected to shrink by 10 percent compared to 2.8 percent assessed earlier. Kuwait on the other hand could decline by 8.1 percent from the prior forecasts at 1.1 percent.
Bahrain and Oman will see smaller alterations to their projections with new estimates suggesting a 4.9 percent and 4.5 percent shrinkage respectively compared to 3.6 percent and 4.3 percent forecasted in April.
Worse not over for Oman
IMF expects most of the Gulf economies other than Oman to improve their economic positions in 2021 with Saudi Arabia recovering the most with an expected GDP growth of 3.1 percent.
While the UAE is forecasted to recover slower with 1.3 percent GDP growth in 2021, Oman is still expected to be in the negative with a 0.5 percent shrinkage.
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