The GCC economies will contract 4.1% in 2020 but the oil-exporting nations will bounce back with 2.2% growth next year
World Bank on Monday projected 4.5 per cent economic contraction in the UAE's economy this year due to impact of coronavirus and shutdowns imposed to contain virus.
But the economy will recover next year and grow 1.4 per cent as oil and non-oil sectors will grow after restrictions ease and normalcy returns to the world economy, it said.
The GCC economies will contract 4.1 per cent in 2020 but the oil-exporting nations will bounce back with 2.2 per cent growth next year as recovery begins in post-Covid-19, according to World Bank's latest report "Global Economic Prospects 2020" released on Monday.
While non-GCC oil-exporters in the Mena region will experience even severer contract of 5.0 per cent this year and slower growth of 2.1 per cent when compared with the Gulf oil exporters.
The Global Economic Prospects 2020 report projected 4.2 per cent contraction for the wider Middle East and North Africa (Mena) region this year and 2.3 per cent growth the year later. The 2020 forecast is notably below 2.4 per cent growth projected in January.
"Oil exporters have been adversely impacted by the plunge in oil prices and Covid-19 outbreaks, while oil importers are experiencing spillovers from the weakness in advanced economies and major emerging markets, pandemic mitigation measure-related disruptions, and an expected drop-off in tourism," World Bank added.
Among oil importers, economic activity is expected to contract by 0.8 per cent in 2020 as compared to 4.4 per cent growth forecast in January by World Bank as tourism declines and exports prospects fade.
Global score
World Bank's 2020 Global Economic Prospects report projected 5.2 per cent shrinkage this year, becoming the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870.
Activity among advanced economies is anticipated to shrink seven per cent in 2020 as domestic demand and supply, trade, and finance have been severely disrupted. Emerging market and developing economies are expected to shrink by 2.5 per cent this year, their first contraction as a group in at least 60 years. Per capita incomes are expected to decline by 3.6 per cent, which will tip millions of people into extreme poverty this year.
"This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges," said Ceyla Pazarbasioglu, Vice-President for Equitable Growth, Finance and Institutions at World Bank.
"The Covid-19 recession is singular in many respects and is likely to be the deepest one in advanced economies since the Second World War and the first output contraction in emerging and developing economies in at least the past six decades," said Ayhan Kose, Group Director for World Bank Prospects.
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