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Why COVID-19 is a Double Whammy for Middle East Countries

Dale Gavlak

   AMMAN, JORDAN - The shock to the global economy from the coronavirus
   outbreak is hitting Middle East economies particularly hard, analysts
   say.

   "It's a double whammy shock for the region," said Jihad Azour, who
   directs the International Monetary Fund's Middle East and Central Asia
   department.

   "First was the shock of the eruption of the virus from China because
   the region is strongly connected to China in terms of trade and
   services. The second episode came with the decline of demand in oil,"
   Azour said, referring to the dramatic drop in fuel consumption. Usage
   fell roughly 30 percent around the world, with airlines grounded and
   fewer vehicles on roadways due to coronavirus lockdowns and the
   resulting economic standstill.

   OPEC oil producers and others, including the United States and Russia,
   have agreed in principle to an unprecedented deal that will slash
   global output by 9.7 million barrels per day in May and June -- the
   largest cut in oil production ever agreed to. They hope the April 12
   deal will end a Russia-Saudi Arabia price war, which sent prices
   tumbling to nearly $20 a barrel.

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