The International Monetary Fund (IMF) has warned of a “big drop” in the growth of Middle East economies, especially those of oil-producing nations, due to the coronavirus crisis. More than 33,000 cases of COVID-19 have been reported in the region, with Iran being hardest hit. Most Mideast countries have imposed regulations that have ground business activity to a near halt. In response, the IMF urged their governments to draw up rescue plans to prevent economic collapse. The bank also revealed that a dozen Middle Eastern and North African countries had inquired about financial relief. The pandemic has exacerbated an oil “price war” spearheaded by Saudi Arabia. Overall, the cost of a barrel of Brent Crude, the international benchmark, has plummeted by more than 50%; as a corollary, state revenues have dramatically fallen. “The coronavirus pandemic has become the largest near-term challenge to the region,” the IMF’s director for the Middle East and Central Asia wrote in a report. Moody’s Investors Service estimates that oil revenues in Iraq and Kuwait will nosedive by more than 10% of the GDP, with declines in Saudi Arabia, Oman, Qatar and Bahrain ranging from 4 to 8%. The company’s projections are based on the expectation that Brent prices will average between $40 and $45 per barrel in 2020. The commodity is currently trading at under $30, with global demand having plunged due to the widespread shuttering not only of businesses, but entire industries, such as tourism and aviation.
IMF Warns Mideast Economies Could Collapse
Posted By Charles Bybelezer On In Mideast Daily News
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