Arab economies to shrink by 5.7% amid coronavirus fallout, says UN report

By: |
Published: July 23, 2020 12:38 PM

The UN's Economic and Social Commission for Western Asia expects some Arab economies to shrink by up to 13%, amounting to an overall loss for the region of $152 billion.

Arab economies, coronavirus fallout, economic contraction, Arab population, COVID 19 crisis, Gulf countries, latest news on arab economiesMore than 55 million people in the region relied on humanitarian aid before the COVID-19 crisis, including 26 million who were forcibly displaced. (AP photo)

The pandemic will exact a heavy toll on Arab countries, causing an economic contraction of 5.7% this year, pushing millions into poverty and compounding the suffering of those affected by armed conflict, a UN report said on Thursday.

The UN’s Economic and Social Commission for Western Asia expects some Arab economies to shrink by up to 13%, amounting to an overall loss for the region of $152 billion. Another 14.3 million people are expected to be pushed into poverty, raising the total number to 115 million a quarter of the total Arab population, it said. More than 55 million people in the region relied on humanitarian aid before the COVID-19 crisis, including 26 million who were forcibly displaced.

Arab countries moved quickly to contain the virus in March by imposing stay-at-home orders, restricting travel and banning large gatherings, including religious pilgrimages. Arab countries as a whole have reported more than 830,000 cases and at least 14,717 deaths. That equates to an infection rate of 1.9 per 1,000 people and 17.6 deaths per 1,000 cases, less than half the global average of 42.6 deaths, according to the UN. But the restrictions exacted a heavy economic toll, and authorities have been forced to ease them in recent weeks. That has led to a surge in cases in some countries, including Lebanon, Iraq and the Palestinian territories.

Wealthy Gulf countries were hit by the pandemic at a time of low oil prices, putting added strain on already overstretched budgets. Middle-income countries like Jordan and Egypt have seen tourism vanish overnight and a drop in remittances from citizens working abroad.

War-torn Libya and Syria have thus far reported relatively small outbreaks. But in Yemen, where five years of civil war had already generated the world’s worst humanitarian crisis, the virus is running rampant in the government-controlled south while rebels in the north conceal its toll.

Rola Dashti, the head of the UN commission, said Arab countries need to ”turn this crisis into an opportunity” and address longstanding issues, including weak public institutions, economic inequality and over-reliance on fossil fuels. ”We need to invest in survival, survival of people and survival of businesses,” she said.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1PSUs struggle to meet FM Nirmala Sitharaman’s target for capital-spend
2GSTN glitch leads to scramble among taxpayers to get data backup; vanished data being restored, says Network
3SC admits I-T appeal challenging settlement commission’s powers