S&P Sees Gulf Business Cycle Taking Several Quarters to Recover
(Bloomberg) -- The business cycle in Gulf countries in likely to take “several quarters at least to fully recover” from twin shocks of the coronavirus pandemic and the drop in oil prices, according to S&P Global Ratings.
Corporate and infrastructure companies in the six-nation Gulf Cooperation Council are expected to operate “conservatively” in 2021 as the economy recovers, according to the report. The GCC comprises Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain.
“Absent a substantial recovery in revenue generation, they are likely to focus on cost optimization, proactively managing their liquidity, and preserving their cash lows, while new investments will continue to take a back seat in most sectors,” S&P credit analyst Timucin Engin wrote in a report.
S&P also said:
- “Pressures look set to continue in corporate sectors, particularly for companies operating in tourism, aviation, real estate, and non-food retail”
- Link to report here
©2021 Bloomberg L.P.