A report by the Financial Times highlighted the economic implications of falling oil prices and the spread of the Corona virus to the economies of the Gulf states, particularly Saudi Arabia and the UAE.
The newspaper stated that the resources of Gulf governments declined with the decline in oil prices and the private sector began to reduce employment rates. The resources of the Gulf governments declined with oil prices and the private sector began to reduce employment rates. Reducing the number of its employees and reducing the working hours of the remaining employees, after the Coruna Dubai virus struck.
Like other countries, the Gulf states have closed economic sectors to counter the spread of the deadly virus. Saudi Arabia has stopped most domestic and international flights and closed most of the stores, except for shops and pharmacies. The United Arab Emirates urged the citizens to stay in their homes and not leave them unless necessary. It has suspended most of its flights, except for evacuation of foreign citizens.
And the Gulf states do not face the repercussions of the Corona virus alone, as they also deal with the repercussions of the decline in oil prices, which fell sharply after the failure of the countries of the “OPEC +” coalition to reach an agreement on production cuts beyond March 2020.
John Sfakianx, Gulf University expert on Gulf affairs, believes that the Gulf economies face one of the most dangerous and important exams they have not seen at all times.
He added that the drop in oil prices is bad news for the Gulf countries, as their financial pillars will be tested.
After oil prices fell to their lowest levels in 17 years, Riyadh announced that it will reduce the budget by 5% to meet the current economic limitations.
This move brought back memories of similar steps taken by the Kingdom in 2014 and 2015, which reflected negatively at the time on the construction sector in the country.
In light of the measures to combat the spread of Corona, the Kingdom of Saudi Arabia announced a $ 32 billion package to help business owners.
The UAE also announced a stimulus package worth 9 billion dirhams ($ 2.4 billion). Dubai banks pay debts for the holidays for those who are forced to leave their businesses and take unpaid vacations, and provide installment plans for school fees and groceries.
Saudi Arabia and the United Arab Emirates have huge reserves. The UAE has $ 850 billion in the sovereign fund, while Saudi Arabia has $ 502 billion.
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