Gulf Economies So Hit by Crisis That Rebound May Be L-Shaped - Bloomberg:
The non-oil economies of the energy-rich Gulf states are likely going in reverse this year, shrinking in the case of Saudi Arabia for the first time in more than three decades.
Once they shift into higher gear, the bounceback will generate so little momentum that a creeping recovery may look “L-shaped” for years to come, according to Ziad Daoud of Bloomberg Economics.
Although higher crude production may pull overall growth higher, the Gulf Cooperation Council -- comprising six monarchies including Saudi Arabia -- will likely suffer a contraction of about 2% this year in non-oil activity, which is a better gauge of economic health and an engine of job creation.
“Non-oil growth in the Gulf could shift to a lower level once the virus crisis is over,” Daoud said. “The severity of the oil shock might make governments reluctant to spend, a prerequisite for a stronger turnaround in the years ahead.”
 |
The main King Fahd road sits empty following a curfew in Riyadh, on March 26.
Photographer: Fayez Nureldine/AFP via Getty Images |
The non-oil economies of the energy-rich Gulf states are likely going in reverse this year, shrinking in the case of Saudi Arabia for the first time in more than three decades.
Once they shift into higher gear, the bounceback will generate so little momentum that a creeping recovery may look “L-shaped” for years to come, according to Ziad Daoud of Bloomberg Economics.
Although higher crude production may pull overall growth higher, the Gulf Cooperation Council -- comprising six monarchies including Saudi Arabia -- will likely suffer a contraction of about 2% this year in non-oil activity, which is a better gauge of economic health and an engine of job creation.
“Non-oil growth in the Gulf could shift to a lower level once the virus crisis is over,” Daoud said. “The severity of the oil shock might make governments reluctant to spend, a prerequisite for a stronger turnaround in the years ahead.”
No comments:
Post a Comment