GCC: Grappling with its worst economic crisis
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• We deepened the recessions in the six GCC countries, and now expect output to contract by 4.4% in 2020. • The aggregated current account balance will shift from a surplus of $88 billion in 2019 to a deficit of $33 billion in 2020. • Financing of the projected fiscal deficit of 10.3% of GDP will remain readily feasible given the GCC’s considerable reserves. • The plunge in oil prices provided a catalyst for reforms, including the resumption of sizable fiscal consolidation. • Most GCC banks are well positioned to absorb the twin shocks.
Subject. The Institute of International Finance, Inc