IMF urges Middle East states to do more over coronavirus-related economic crisis
IMF urges Middle East states to do more over coronavirus-related economic crisis
The IMF has urged Middle East states to take firm action to tackle an economic crisis gripping the world.
2 min read
Oil prices have been hit hard during the crisis [Getty]
Middle East governments must do more to more to tackle an economic crisis gripping the world due to the coronavirus pandemic, the International Monetary Fund (IMF) warned on Monday.
The IMF said that the coronavirus crisis will likely lead to a persistent slump in oil revenues and a "big drop" in growth, as the price of oil drops below $30 a barrel.
It also said that around a dozen governments of Middle East states had approached it for financial support during the economic crisis due to the pandemic, which has seen daily life grind to a halt in many countries in the region.
The IMF said that governments should draw up rescue packages to help businesses survive the coming months, as a protracted lockdown due to the virus begins.
"The region is likely to see a big drop in growth this year," the IMF's regional director for the Middle East and Central Asia, Jihad Azour, said in a report.
Among the events that will impact on growth in the region is low oil prices, civil unrest and US sanctions against Iran, but the biggest threat of all is the coronavirus pandemic.
"The coronavirus pandemic has become the largest near-term challenge to the region," Azour said.
"The pandemic is causing significant economic turmoil in the region through simultaneous shocks - a drop in domestic and external demand, a reduction in trade, disruption of production, a fall in consumer confidence, and tightening of financial conditions." Among the sectors hit hard by the coronavirus crisis is tourism, with travel bands enforced and flights grounded to stop the spread of the virus.
The sector has been a vital source of income for many Middle East states and an area for non-oil growth in the Gulf region.
Similarly, retail and other key areas of economic growth have also been hit hard.
Saudi Arabia has also started an oil war with major producer Russia due to a dispute on output.
Despite the massive global economic slowdown, Saudi Arabia is pushing ahead with ramping up oil production.
IMF chief Kristalina Georgieva said Monday that world economic growth will be negative this year and could be worse than the 2008 global financial crisis, further sapping demand for Middle East oil.
The IMF said that the coronavirus crisis will likely lead to a persistent slump in oil revenues and a "big drop" in growth, as the price of oil drops below $30 a barrel.
It also said that around a dozen governments of Middle East states had approached it for financial support during the economic crisis due to the pandemic, which has seen daily life grind to a halt in many countries in the region.
The IMF said that governments should draw up rescue packages to help businesses survive the coming months, as a protracted lockdown due to the virus begins.
"The region is likely to see a big drop in growth this year," the IMF's regional director for the Middle East and Central Asia, Jihad Azour, said in a report.
Among the events that will impact on growth in the region is low oil prices, civil unrest and US sanctions against Iran, but the biggest threat of all is the coronavirus pandemic.
"The coronavirus pandemic has become the largest near-term challenge to the region," Azour said.
"The pandemic is causing significant economic turmoil in the region through simultaneous shocks - a drop in domestic and external demand, a reduction in trade, disruption of production, a fall in consumer confidence, and tightening of financial conditions." Among the sectors hit hard by the coronavirus crisis is tourism, with travel bands enforced and flights grounded to stop the spread of the virus.
The sector has been a vital source of income for many Middle East states and an area for non-oil growth in the Gulf region.
Similarly, retail and other key areas of economic growth have also been hit hard.
Saudi Arabia has also started an oil war with major producer Russia due to a dispute on output.
Despite the massive global economic slowdown, Saudi Arabia is pushing ahead with ramping up oil production.
IMF chief Kristalina Georgieva said Monday that world economic growth will be negative this year and could be worse than the 2008 global financial crisis, further sapping demand for Middle East oil.
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