The rollout of COVID-19 vaccines and easing of containment measures will boost all the MENA economies in 2021, though this will be quicker in the Gulf countries,
The Ministers of Finance of the Kingdom of Saudi Arabia, the United Arab Emirates, the State of Kuwait…
1274 | the publication reaches you by | Bahrain NewsEconomic recoveries, which started in the middle of this year, and the recent positive news on COVID-19 vaccines has brightened the near-term outlook. The Gulf countries as well as Egypt appear to be better placed to secure access to vaccines through direct purchases from pharmaceutical companies, Capital Economics said in a report.
“In some cases, such as Saudi Arabia and the UAE, vaccination programmes have already started and this should pave the way for virus containment measures to be lifted in the first half of 2021. In contrast, other parts of the region look set to lean heavily on the multilateral COVAX facility to access vaccines. Distribution is likely to be slower than in countries with direct pre-orders,” said, Jason Tuvey, Senior Emerging Markets Economist at Capital Economics.
In addition, those where sectors that are vulnerable to social distancing make up a larger share of output will also be major beneficiaries – Dubai stands out. There will also be indirect benefits through stronger external demand, an improvement in global risk appetite and higher oil prices (more below), the report said.
MENA economies are likely to suffer a longer-lasting legacy from this crisis compared with most other parts of the world. Governments across the MENA have provided little direct fiscal support so far, which is likely to have resulted in higher company liquidations and unemployment, as well as a rise in bad loans on banks’ balance sheets. “This will hold back demand. We expect all MENA economies will still be below their pre-virus growth paths by the end of 2022,” Tuvey said.
(Writing by Seban Scaria
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The Arab states of the Persian Gulf are the seven Arab states which border the Persian Gulf, namely Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).This excludes the non-Arab state of Iran. All of these nations except Iraq are part of the Gulf Cooperation Council (GCC).
