“Moody's” credit rating agency expected that the Gulf countries would need between two to three years, in order for the real gross product to reach pre-Corona pandemic levels, indicating that this recovery will be long-term in various economies, as sectors such as tourism and transportation will be slower in recovery. According to the agency, the continuing economic effects of the epidemic will result in the employment rates of citizens not recovering soon due to the high targets for employment in the private sector industries that were severely affected by the shock. According to the report, the State of Kuwait will be one of the fastest recovering countries, while the United Arab Emirates will be the last to recover.
Moody's expects the debt of Gulf governments to rise on average to 21 percent of GDP during the period from 2019 to 2021, compared to an average of 14 percent for advanced economies. Nevertheless, sovereign funds will contribute to mitigating the impact of the increasing debt burdens on the Gulf economies.
The agency does not expect the Gulf countries to continue pumping stimulus packages this year, after the size of the packages it pumped last year to face the repercussions of Corona amounted to less than 2% of GDP. Meanwhile, debt service will remain below 1.5 percent of the GDP for Kuwait, Saudi Arabia and the UAE. While, the debt service in the Sultanate of Oman will increase and be the highest in the Gulf, rising to 4.3 percent this year, from 2.3 percent in 2019.
Source (Al-Arabiya.net, Edited)
