“Bloomberg Global Economy Watch” expected that the downturn in the Gulf countries, which is considered the most severe in the world will continue for a longer period, at a time when the Corona pandemic causes an expansion of the decline in prices, which began with a contraction in real estate markets.
According to a report by the “Bloomberg” News Agency, the price drop in Qatar, Bahrain and the UAE is currently the largest among more than 80 countries, followed by Oman with a smaller decline.
On the other hand, the data showed positive inflation in Kuwait, with a recovery in Saudi Arabia, after doubling the value-added tax three times.
The report showed that the restrictions imposed to stop the virus led to a record contraction in Qatar and the UAE, as the rules of social distancing, job loss and the departure of foreign workers led to a significant decline in consumer demand.
In addition to the drawdown from the housing sector, the decline in oil prices represents a new challenge to the region's economy of $ 1.6 trillion, putting it on the path to what could be the worst recession in history.
The report indicated that the issue of the return of inflation is a pivotal aspect that will divide the financial world. However, the risk of continuous decline in prices in the Gulf region may not have the same repercussions that would result from countries with independent monetary policy and flexible exchange rates.
Source (Al-Rai Kuwaiti newspaper, Edited)
