(GCC) Growth Expectations – The International Monetary Fund (IMF) Report

IMF proceeds with its negative view of the performance of the global economies as well as the GCC economies. Its expectations for all of them will change from positive growth in the October 2019 report to negative growth for all of them by varying degrees. The highest expected negative growth rates belonged to the State of Qatar whose economy was expected to grow by about 2.8% in 2020 as in the October 2019 report, but the April 2020 report numbers were adjusted to negative growth by -4.3%. Positive growth by about 5.0% will be achieved in the year 2021.

IMF expects the second-highest negative growth rate for Bahrain whose growth estimates were reduced by the IMF from about 2.1% in October 2019 to negative growth by -3.6% in April 2020. It, however, will achieve positive growth by about 3.0% in 2021. UAE came third with a decrease in its growth estimate from 2.5% in October 2019 to a negative growth of -3.5% in April 2020. These estimates will change to positive growth by 3.3% in 2021.

Oman comes forth in its growth estimates which will drop from 3.7% in October 2019 to a negative growth of -2.8% in April 2020 but will rise again to 3.0% in 2021. Saudi Arabia, the region’s largest economy, comes fifth and the International Monetary Fund reduces its growth estimates for KSA from 2.2% in October 2019 to negative -2.3% in April 2020. It will then increase to 2.9% in 2021. Finally comes Kuwait whose growth estimate is reduced from 3.1% in October 2019 to a negative growth by -1.1% in April 2020, then it will rise again to positive growth of 3.4% in 2021, i.e. with the lowest reduction.

These estimates are likely to contain a high degree of error as no one now knows with an acceptable degree of certainty the course of the performance of the global economy. 

Neither does anyone know the course of the oil market which is affected almost completely by the sectors that depend on it, and a bigger weakness of the more importing economies. Kuwait, as is the case with most oil countries, cannot but assume the worst-case scenario and plan its policies to confront it. There is nothing wrong in hoping for the best as it is impossible to continue the very weak level of oil prices beyond the short term, or even for the remainder of this year.