Post-Virus Gulf-Region Rebound? Not V Nor U, But L-Shaped

(Bloomberg) -- Forecasters are debating whether the global downturn from the coronavirus outbreak is going to be short (V-shaped) or protracted (U-shaped), but for the Gulf Cooperation Council -- the six-member group of Gulf Arab countries consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates -- the slump could be L-shaped, with growth permanently shifting to a lower level, according to Bloomberg Economics. On every metric, the economies are weaker today than before the last oil price shock in 2014: non-oil growth is slower, reserves are lower, debt is higher and deficits are wider. Non-oil growth in Saudi Arabia, the largest GCC economy, will probably fall to -2% this year -- the first contraction in more than three decades.

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