International Monetary Fund (IMF) said that the countries in the Middle East and Central Asia region will see an economic crisis bigger than the 2008 global financial crisis and the 2015’s oil shock.
The fund said earlier this week the global economy was expected to shrink by 3.0% during 2020 in a coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s.
In the Middle East, countries that rely heavily on oil exports will suffer the additional pressure of collapsing oil prices caused by reduced demand for oil and, until last Sunday, a battle for market share between oil titans Saudi Arabia and Russia that added to a glut of oversupply.
Real GDP among regional oil exporters could contract by 4.2% this year, a sharp downward revision from the IMF’s 2.1% growth projected in October last year. Their oil exports are expected to decline by more than $250 billion.
Saudi Arabia, the world’s biggest oil exporter, is expected to see its economy shrink 2.3% this year from 0.3% growth in 2019, said the IMF, which had forecast 2.2% in real GDP growth for this year before the pandemic changed all growth scenarios.
Iran – the Middle East country worst hit by the disease – is seeking $5 billion in emergency funding from the IMF, as it tries to balance virus containment measures with action to boost a suffering economy already bruised by U.S. sanctions.
“Necessary containment measures to halt the spread of the virus have affected job-rich sectors across the region, with negative effects on confidence and non-oil activity,” the IMF said in its Regional Economic Outlook.
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