The long road to post-COVID economic recovery in the Middle East

While we are very much still in the middle, or even at the outset, of the economic impact of the coronavirus pandemic and lower oil prices across the Middle East, there are some troubling signs that recovery will be more difficult than in other emerging market regions. The early evidence suggests that we will see significant variation in economic growth, with Asian economies already showing stronger resilience than Latin America or the Middle East.

On July 13, the International Monetary Fund released its updated economic outlook for the Middle East and North Africa, with a downward revision in (already negative) growth for oil exporters in 2020 to -7.3% decline in real gross domestic product (GDP), before returning to positive growth of about 3% in 2021. This amounts to a loss in oil export revenue to the region of about $270 billion in 2020. For oil importers in the region, the decline in expected growth is more moderate, at -1.1% for 2020 before returning to feeble positive growth of under 2% in 2021.