Gulf states could face higher fiscal deficits as coronavirus set to cut global oil demand, says analyst | ZAWYA MENA Edition

Gulf states could face higher fiscal deficits as coronavirus set to cut global oil demand, says analyst | ZAWYA MENA Edition:

Government coffers in the Gulf Cooperation Council (GCC) region could face further pressure this year, with the novel coronavirus (Covid-19) outbreak expected to dampen oil demand during the first quarter of 2020.

According to Raghu Mandagolathur, executive vice president of Kuwait Financial Centre (Markaz), a contraction in demand for oil, coupled with the decline in prices, could impact public finances and prompt Gulf states to borrow funds.

A new analysis from the International Energy Agency (IEA) showed that global oil demand is now expected to fall during the first three months of the year the first quarterly drop in more than a decade - because of the coronavirus.

“Global oil demand has been hit hard by the novel coronavirus and the widespread shutdown of China’s economy,” IEA said on Thursday.