Skip to main content

IMF official: Gulf economies to contract by 7.6% in 2020

The International Monetary Fund official's predictions are worse than earlier ones as the Gulf deals with oil price drops and the COVID-19 pandemic.
TOPSHOT - A trader walks by beneath a stock display board at the Dubai Stock Exchange in the United Arab Emirates, on March 8, 2020. - Saudi's stock exchange fell 6.5 percent and other Gulf markets tumbled to multi-year lows at the start of trading after OPEC and its allies failed to clinch a deal over oil production cuts. (Photo by GIUSEPPE CACACE / AFP) (Photo by GIUSEPPE CACACE/AFP via Getty Images)

Gulf economies will shrink more than twice as much as predicted, an International Monetary Fund (IMF) official said today.

The dual threat of the COVID-19 pandemic and price drops in oil threaten economic growth in Gulf Cooperation Council (GCC) states, according to the institution’s Middle East department director.

“We expect the GCC economies to contract by 7.6% this year; the contraction will be across all sectors, oil and non-oil,” said Jihad Azour at a forum today, according to Reuters.

In April, the IMF’s forecasts for GCC economic contraction were around 3%.

The GCC consists of Arab states in the Gulf, namely Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. The region is rich in oil and the commodity is a major revenue source for these states.

A fall in oil demand caused by the coronavirus and a price war between Saudi Arabia and Russia led to a massive drop in global oil prices this year.

Brent crude, a global benchmark for oil prices, fell to a 21-year low of under $16 a barrel in April. In May, prices began to recover after dialogue led to production cuts. Brent was priced at more than $41 a barrel today.

In March and April, both the Emirati and Saudi private sector non-oil economies were already shrinking, according to the global information firm IHS Markit.

The pandemic continues to hit the Gulf hard, particularly Saudi Arabia, which is registering thousands of cases per day. However, several Gulf countries have recently lifted their virus-related lockdowns in bids to restart their economies. Saudi Arabia lifted its curfew last week, as did the Emirates. Qatar will begin reopening businesses Wednesday.

Restrictions remain in place in the region, though. Saudi Arabia will have a limited hajj pilgrimage this year, only allowing travelers who are already in the country to be pilgrims, for example.

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in