The latest International Monetary Fund (IMF) report says that the economic toll of the coronavirus and the sharp decline of oil prices would lead to a contraction of 7.3 per cent in the Gulf Cooperation Council (GCC) economies.
The decline in the oil prices, due mostly to the unprecedented fall of demand because of the global containment measures aimed to slow the spread of the COVID-19 outbreak “will result in $270 billion lost revenues for GCC countries,” the report explains.
There are no surprises here. All economies of the world, especially the major ones, have been severely impacted by the pandemic. Singapore on Tuesday announced it has officially gone into recession as the economy shrunk by a staggering 41 per cent on quarterly basis.
The UAE emerged faster and stronger from the 2008 global crisis. And today, we are reaping the benefits of these plans as the world reels under the devastating impact of the pandemic
The Eurozone expects an economic collapse of more than 8 per cent because of the pandemic, leading to what is being described as the European Union’s worst recession ever. The United States and China face similar conditions.
However, the good news in the IMF report is that the UAE fares better than many others do. “The biggest positive element about the UAE economy is that the authorities reacted very quickly in checking the spread of the coronavirus.
Massive liquidity support
This has helped the UAE to gradually open up the economy,” an IMF official explained. He noted that despite the impact of COVID on financial markets, the UAE was quick to gain its access to international markets to raise funds while supporting the economy through various support measures including massive liquidity support through the banking system.
The assessment underscore the strength of the fundamentals of the UAE economy. The long planned diversification of the economy, to eventually end the dependence on oil exports, has paid the country dividends during the current global crisis.
In Dubai, major projects have not stopped. Just last week, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, inaugurated Route 2020, the 15km extension of Dubai Metro’s Red Line linking the Expo Dubai-2020 site with the mass transport system.
The Dh11 billion project, spanning 15km with seven stations, will be opened to the public from September this year. The launch of the Mars probe, Hope, is another example.
The UAE’s sound planning has served the country well during the 2008 great financial crisis. The country emerged faster and stronger from that global crisis. And today, we are reaping the benefits of these plans as the world reels under the devastating impact of the pandemic.