Gulf economies set for steep contractions this year before rebounding - Reuters poll | Reuters

Gulf economies set for steep contractions this year before rebounding - Reuters poll | Reuters

The six-member Gulf Cooperation Council faces a steep economic contraction this year before partially rebounding in 2021, with most countries facing sharper declines than previously estimated, a quarterly Reuters poll showed.

Analysts in the Oct. 13-25 poll maintained their view that the region’s heavy dependence on hydrocarbons left it particularly hard-hit by the coronavirus crisis because of its effect on oil demand and prices.

New lockdown measures as infections continue to soar in the United States, Europe and elsewhere, could exacerbate already depressed economic activity.

Saudi Arabia, the region’s largest economy, is expected to face a GDP contraction of 5.1% this year and rebound to 3.1% growth next year and 2.7% growth in 2022. A poll conducted three months ago saw the world’s largest oil exporter contracting 5.2% in 2020.

“The region is now facing tough policy choices. Fiscal support is still needed to fight persistent and rising infections, already showing up in Europe and the U.S.,” noted analysts at NBK.