Saudi Gazette report

RIYADH – A recent report by the Council of Saudi Chambers summarizes the status of the impact of COVID-19 pandemic on Saudi Arabia and has come up with three probable scenarios before the national economy. It indicates controlling the virus by June 2020 and that might lead to the gradual return to business.

The report entitled “The economic effects of COVID-19” has been prepared by the Information and Research Center at the Council of Saudi Chambers.

The three scenarios mentioned in the report were based on the period of time. The first scenario indicates that the coronavirus pandemic will be controlled by the end of April. The second scenario says this will be by June, while the third scenario claims that the situation would drag down till September.

The report has set points for each stage, assessing the effect on the Gross National Product (GNP), a report in Arabic daily Asharq Al-Awsat said.

The second scenario is the most likely to take place, according to the report, as controlling the economic impact will lead to easing the lockdown measures by the end of April 2020. Return to normal life will take place gradually, at a time when the world is waiting for developments in manufacturing or innovating vaccines so as to expedite restoration of economic activity.

The report draws attention to the fact that the Saudi economy is still showing high resilience and strength, a high credit level as certified by the international credit rating institutions. In addition, there is a huge reserve of foreign exchange reaching $490 billion that can cover the value of 47 months of imports, equivalent to eight times the global rate. All these allay all fears of any crisis related to imports.

On the other hand, the report says the balance of trade for nonoil commodities’ external trade during last January registered a SR23.4 billion ($6.2 billion) deficit, showing a 10.7 percent recession compared to the same period in 2019. Also, exports registered a drop in petrochemical products, which form 30 percent of the export commodities.

The report showed that aviation is the most impacted sector in the Kingdom following the imposition of travel restrictions. The report said that it is expected that the precautionary measures taken by suspending flights will have a great impact on tourism sector, noticeably the Umrah and Haj sector.

Five recommendations

The report came up with five major recommendations, most crucial being the stress on the workers' dossier. The report stressed the necessity to create a new program for deporting violators of the residency (iqama) regulations, side-by-side with the call to put a limit to inundating the market with unskilled workers, while stressing the importance of relying on Saudi capabilities in all fields.

The report added that the COVID-19 crisis necessitates working on a strategy of self-sufficiency in the food and health sectors, in addition to enhancing the research and development capabilities and laboratories.