DUBAI: The International Monetary Fund (IMF) revised down on Tuesday its 2020 real gross domestic product (GDP) projections for most Gulf countries, as it warned the economic outlook was worsening for many emerging markets amid the coronavirus crisis.
The IMF forecast a 2020 global contraction of 4.4% in its latest World Economic Outlook, an improvement over a 5.2% contraction predicted in June, but said it was still the worst economic crisis since the 1930s Great Depression.
Countries in the oil-rich Gulf are suffering the double shock of the coronavirus crisis, which is dampening demand in the non-oil economy, and low oil prices, which have been hurting revenue this year.
The IMF revised down its previous forecasts for all Gulf countries except Saudi Arabia, which is now expected to contract 5.4% this year, against a previous 6.8% contraction estimate.
The United Arab Emirates – the Gulf’s second largest economy – could shrink by 6.6% this year, the IMF said, against a previous forecast of a 3.5% contraction.
The biggest revisions were for Oman and Kuwait, which are expected to shrink by 10% and 8.1%, respectively. In April, the IMF had predicted a contraction of 2.8% in Oman and 1.1% in Kuwait.
Qatar and Bahrain are expected to see their economies shrink by 4.5% and 4.9%, respectively, the IMF said, against April contraction forecasts of 4.3% and 3.6%.
All the Gulf economies, except Oman, are expected to swing back to growth next year, with Saudi Arabia leading the six-nation group, jumping back to 3.1% GDP growth in 2021, the IMF estimated.
Economic recovery in the UAE is projected to be slower, with 1.3% growth next year, while Oman is forecast to remain in negative territory, with a 0.5% contraction.