Covid-19 and Oil Price Collapse: Coping with a Dual Shock in the Gulf Cooperation Council

In a nutshell:

• Countries in the Gulf Cooperation Council (GCC) face a dual shock—from both the Covid-19 pandemic and the collapse in oil prices.
• Authorities should focus first on responding to the health emergency and the associated risk of economic depression and postpone fiscal consolidation linked to the persistent drop in oil prices until recovery from the pandemic is well underway.
• A combination of bailouts, eased credit condition and monitoring is needed to support the private sector, including small- and medium-sized enterprises. Cash transfers to vulnerable households, including expatriate workers, would help protect them and support consumption.