|30 March, 2020

Gulf countries set to face headwind from coronavirus, low oil prices, capital flight: S&P

Saudi Arabia is likely to see a "sharp rise" in its fiscal deficit this year

A Saudi man walks past a poster depicting Saudi King Salman bin Abdulaziz, after a curfew was imposed to prevent the spread of the coronavirus disease (COVID-19), in Riyadh, Saudi Arabia March 25, 2020. Image used for illustrative purpose.

A Saudi man walks past a poster depicting Saudi King Salman bin Abdulaziz, after a curfew was imposed to prevent the spread of the coronavirus disease (COVID-19), in Riyadh, Saudi Arabia March 25, 2020. Image used for illustrative purpose.

REUTERS/Ahmed Yosri

DUBAI: Gulf oil exporting countries are expected to face headwinds this year from lower oil prices, economic pressures due to the coronavirus outbreak, and capital flight from emerging markets, S&P Global Ratings said.

Saudi Arabia is likely to see a "sharp rise" in its fiscal deficit this year due to oil supply increases and a collapse in oil demand, S&P said in a webcast on Monday.

But financially weaker Gulf countries like Bahrain and Oman would be likely to receive support from their wealthier Gulf neighbours if their currency pegs to the U.S. dollar were to be under threat, the credit rating agency said.

(Reporting by Davide Barbuscia; Editing by Catherine Evans) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

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