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Impact Of Corona Virus On The Middle East Economy

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Photo: middleeasteye.net

ArsiaNews, Tensions in the Middle East re-occur by the Corona Virus or COVID-19 attacks that have spread across various Middle Eastern Countries, this will have an impact on oil prices, tourism and capital markets.

The World Health Organization (WHO) declared the virus a global pademic after spreading to more than 110 countries and infecting at least 121,000 people.

The virus has spread in Middle Eastern countries such as Saudi Arabia, Bahrain, UAE, Oman and the most severely affected countries. The most severe virus is the State of Iran, reaching 12,729 cases of death from corona virus infection until Saturday (3/14). drasitis to 611 people. The latest death toll has been reported by 97 people, according to health ministry spokesman Kianoush Jahanpour.

The impact will have an impact on:
Oil prices
According to the site www.cnbc.com Oil is one of the “main” export products of the Gulf Cooperation Council countries, and prices have dropped dramatically this week after OPEC and its allies failed to reach an agreement to cut production.
Crude oil futures fell more than 20% on Monday after Saudi Arabia said it would increase production and give discounts on its oil. On Thursday afternoon in Asia, Brent crude fell 6.01% at $ 33.64 per barrel, while US crude traded at $ 31.15 a barrel, down 5.55%.
That is likely to be a problem for countries in the region, many of which are very dependent on oil revenues.
Impact added that S&P Global Ratings revised its estimated price from $ 60 per barrel to $ 40 per barrel for this year. The figure is below the fiscal break-even oil price for all Middle Eastern and North African oil producers, according to IMF data.
“And if you look at the geographical distribution of exports, you can see for example for Oman, more than 53% of exports go to countries where we see high COVID-19 cases or surges,” he said.

Travel and real estate
Expenditures by foreigners are also likely to be hit by coronaviruses, especially in Saudi Arabia and the UAE.

The UAE attracts more than 17 million visitors each year, Damak said, and this year hopes to attract 25 million tourists to the Dubai 2020 Expo in October.

Saudi Arabia receives 20 million tourists every year, most of them for religious purposes. The kingdom has temporarily suspended entry into the country for Umrah and visited the Prophet’s Mosque, an important site for Muslims.

Damak said, at this stage, it was difficult to say whether Expo 2020 and the hajj season – which began in July – would be affected by a virus outbreak.

“If that is the case, then obviously the economic impact on Saudi Arabia and the UAE will be higher than what we expect now,” he said.

On the real estate side, he pointed out that Chinese buyers themselves contributed to 1% of real estate transactions in Dubai in 2018. But the buying decision could be postponed because of the “psychological effect” of coronavirus despite falling interest rates, he said.

Capital market
There has been “extreme volatility” in the capital market recently, and that may mean companies with “weak credit stories” will have difficulty coming to the market, Damak said.

“This means that Bahrain, Oman and maybe some companies in the UAE might find it a little more difficult to go to market this year.”

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