Standard & Poor's for credit rating suggested that the business cycle in the Gulf countries would take at least several quarters to fully recover from the dual shocks of the Coronavirus epidemic and the drop in oil prices.
According to the agency, Gulf economies will achieve moderate growth in GDP this year, reaching an average of 2 percent after the big shocks that occurred in 2020 in light of the Covid-19 pandemic and low oil prices. Indicating that pressures will continue in the corporate sectors, especially companies operating in the tourism, aviation, real estate and non-food retail trade sectors, while the food retail sector will be one of the strongest sectors.
It also expected that most companies would maintain conservative strategies, with the main focus on controlling expenses, proactively managing liquidity, and maintaining liquidity flows, while new investments would remain limited in most sectors.
The agency revealed that the average GDP growth of the Gulf economies combined will be 2.5 percent during the period between 2021 & 2023. The report expects that the average price of a barrel of Brent crude will reach $50 in 2021 and 2022 and $55 in the year 2023 and onward. It is expected that large-scale vaccination operations, which could be carried out by some countries by the middle of the year, will help pave the way for the return of social life and economic activity to normal levels.
Source (Al-Arabiya.net website, Edited)
