Fitch, the credit rating agency, revealed that Arab countries have adopted harsh financial measures to contain the repercussions of the Corona crisis on their public finances, in the absence of economic opportunities and improved living standards to satisfy the peoples that are still growing rapidly and are predominantly young and suffering from a lack of employment, which would threaten a violent political and social reaction in the coming year in the absence of any economic improvement.
According to the agency, after a sharp contraction this year, most of the region's economies are expected to return to growth with the recovery of oil prices and the decline in stimulus spending to confront the Covid-19 pandemic. However, according to "Fitch", "the lower oil prices for a longer period and other possible repercussions of the pandemic, raise questions about the economic and social models in the long term for the countries of the GCC."
The Kingdom of Saudi Arabia, the largest Arab economy and the largest oil exporter in the world, has tripled the value-added tax this year to 15 percent to compensate for the damage inflicted on its public finances by the drop in oil prices.
"Fitch" indicated that the social reaction in the face of financial reforms will pose a threat to reduce credit ratings in 2021, especially in Oman and Saudi Arabia, and to some extent in Iraq, Jordan and Tunisia.
Source (Al-Araby Al-Jadeed Newspaper, Edited)
