As the first recorded cases of the coronavirus in Europe and the Middle East were announced over the course of these past few weeks, global financial markets slowed down heralding the possibility of another global financial crisis on the scale of that of 2008.
At the time being, in countries all over the world, major events that include the gathering of a large number of persons are being canceled, entire cities are put on lockdown, and the growth rate of many businesses is plummeting. Even as a number of health experts, including the president of the World Health Organization, assure the public that a global pandemic could still be averted, the coronavirus scare has nonetheless taken a huge toll on the livelihood of many businesses as well as individuals worldwide.
Upheaval in stock markets and disruption in supply chains have been the hallmark of these past few weeks for the economies of the Arab nations and beyond. A number of industries, including tourism, aviation, and automobile manufacturing, are struggling to cope with the drawdown of the global economy.
The Saudi and Emirati economies, the Arab World’s two largest, had seen limited growth over the weekend as business conditions worsened because of the coronavirus ripples that began in China some months ago.
The IHS Markit noticed “a sharp loss of momentum since the start of 2020” for Saudi Arabia; the Purchasing Managers’ Index for Saudi dropped to 52.5 in February from 54.9 recorded in January, showcasing the slowest improvement in almost two years.
“The U.A.E.’s non-oil private sector suffered another blow in February,” David Owen, Economist at IHS Markit, said in a report.
According to Bloomberg, the IHS Markit U.A.E. PMI plummeted for a second month to remain below the threshold of 50 that separates contraction from growth.
With fewer and fewer people traveling abroad, the Emirates Group, which is in charge of the world’s largest airline in terms of traffic, has offered its staff up to a month’s leave as a result of global demand diminishing.
At this point, the majority of experts believe that we do not have enough input to predict the virus’ trajectory and its impact on the global economy. With the reassurance of health experts it is believed that in due time, global economies could recover, but it is still too early to make predictions.