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Merge 104.8 | 10 June 2020
The World Bank has projected that the Oman’s gross domestic product (GDP) will grow by 2 per cent in 2021, compared to a contraction of 4 per cent in 2020 due to the implications of the global COVID-19 pandemic and low oil prices.
As Oman News Agency (ONA) reports, in the World Bank’s June report ‘Global Economic Prospects’, the authority pointed out that the Sultanate’s GDP growth in 2021 will be the highest during the last five years. The Sultanate recorded a growth of 0.3 per cent in 2017, 1.8 per cent in 2018, and 0.5 per cent in 2019.
As per ONA, the World Bank expects economic activity in the MENA region to shrink by 4.2 per cent in 2020 as a result of the pandemic and oil market developments. The Bank explained that the COVID-19 pandemic and the efforts to contain it weakened economic activity in the region in the short-term. The increasing reluctance of investors to bear risks also led to intensified bouts of volatility in financial markets and the sharp decline in oil prices, as demand in global markets led to shrinking exports from oil-producing countries. This also had repercussions on non-oil sectors, with these challenges exacerbated by several long-standing structural imbalances.
The Bank also pointed out that the rapid and severe shock of the global COVID-19 pandemic and the lockdown measures taken to contain it have plunged the world economy into the midst of a severe contraction. According to the Bank’s expectations, the global economy will witness a contraction of 5.2 per cent in 2020. This, according to the World Bank, will represent the most severe recession since World War II.
The report said that economic activity in advanced economies is expected to shrink by 7 per cent in 2020 due to the severe turbulences that affected the two sides of domestic demand and supply, along with trade and finance. It affirmed that forecasts indicate that emerging market economies and developing countries will see a contraction of 2.5 per cent in 2020, which is its first contraction as a group in at least 60 years. The average per capita income is expected to decrease by 3.6 per cent, causing millions of people to fall into extreme poverty.
“These expectations are extremely worrying, and the crisis is likely to leave long-term scars, and create massive global challenges,” said Ceyla Pazarbasioglu, Vice President for Equitable Growth, Finance and Institutions (EFI) at the World Bank Group (WBG). “The Bank’s main concern is currently addressing the global health and economic emergency. After that, the international community must join forces to find ways to rebuild a solid recovery as possible to prevent more people from falling into poverty.”
Source: ONA
(Also read: World: New Zealand states it is COVID-19-free, lifts all restrictions.)
