Is the Economy Effected ?
The Spread of this COVID 19 Pandemic has left a huge impact on Local and international Stock Market, and spread largely in Gulf Countries leaving the countries with a huge challenge to face.
The questions here are was the Saudi Arabia Market effected badly by this pandemic?
Will it be able to rise back after the pandemic is over?
And what was largely affected in the Saudi Market?
Due to the Pandemic the Oil Revenue was down more than half to which the Saudi Arabia’s finance minister has warned the kingdom needs to make “extreme” spending cuts to manage the economy during the COVID-19 crisis and oil price crash.
Scenario 1: Albara’a Alwazir, economist at US-Saudi Arabian Business Council , says: “Given the impact COVID-19 and the drop in oil prices is having on global markets, we expect a downturn in Saudi Arabia’s economic activities at least for the first half of 2020.”
Given that oil was responsible for an estimated 63% of national revenue, according to IMF projections, the sharp fall in prices is set to place significant pressure on government budgets.
However, the cuts have been largely deemed not deep enough to have a sufficient impact on the market.
Scenario 2 : On the other hand, as there are major travel restrictions in place globally, it will effect Tourism heavily so the direct net impact of Covid-19 on the trade balance should be relatively small.
While all sectors will face downside risks, it will be more considerable for the hospitality, transport, and retail real estate sectors, which are largely dependent on consumer demand.
Finally according to the economic Saudi Expert While the kingdom announced a 5% reduction in its budget to offset these challenges, it is also injecting $32bn (SAR120bn) in financial support to combat COVID-19.