Arab Gulf Economies Cope With a COVID-19 Conundrum
MIN READMay 1, 2020 | 10:00 GMT
A trader wearing a protective mask stands on the floor of the Boursa Kuwait stock exchange in Kuwait City, Kuwait, on March 1, 2020. Plummeting oil and gas prices amid the global COVID-19 crisis have hit the seven energy-rich nations in the Gulf Cooperation Council (GCC), including Kuwait, particularly hard.
(YASSER AL-ZAYYAT/AFP via Getty Images)
The Arab Gulf states within the Gulf Cooperation Council (GCC) are looking down the barrel of a serious, multilayered economic shock as COVID-19 disrupts their main revenue sources by slashing energy prices as well as overall global demand. The sharp reduction in government income across the region portends increased budget deficits and significant borrowing in the months ahead, creating debt that will complicate spending and investment for years to come. But while they may be delayed, Gulf states' diversification strategies and social reform plans won't be canceled, as the crisis has also made clearer than ever the need for GCC governments to wean their economies off of oil and gas, and their populations off of state aid. ...