The Arab region could lose over 1.7 million jobs due to the coronavirus crisis and the service sector would be the most affected, a UN report said.
The area is losing jobs “at an alarming rate” due to the drastic measures adopted to prevent the spread of the coronavirus, the report issued by the Beirut-based Economic and Social Commission for Western Asia said on Wednesday.
In the UN’s first economic assessment to this area, the international organization estimates that the Arab region’s GDP will fall by at least $42 billion in 2020, reports Efe news.
However, it warned that the loss could be higher due to low oil prices and the dramatic slowdown of economies caused by “the closure of public institutions and private sector enterprises starting mid-March”.
The unemployment rate will increase by 1.2 percentage points, with the service sector as the most affected due to the social distancing, according to the report.
“We are under a global health threat which may alter the world as we know it… But we can start to assess our economic losses and find ways to mitigate them,” ESCWA Executive Secretary Rola Dashti said.
The coronavirus prompted a “significant decline” in oil prices, which cost the region “nearly $11 billion in net oil revenues between January and mid-March 2020”, the organization said, warning that the loss could increase over the upcoming weeks.
The decline of oil prices and stock markets around the world due to the novel virus led Saudi Arabia to ask OPEC+ to cut production by 1.5 million barrel per day when the existing deal ends by 31 March.
Russia opposed the proposal, triggering an oil pricing war between the two countries.
Amid this war, Saudi Arabia has changed its stance and has been seeking prices fall.
The World Bank warned that both falling oil prices and the coronavirus outbreak have left the Middle East and North Africa more exposed compared to other regions.
At least 17 Arab countries have reported confirmed coronavirus cases, according to the World Health Organization.
Since the beginning of the month, the region’s countries have implemented several measures such as flight suspensions, closure of public spaces and institutions and a curfew in extreme cases.
Qatar is currently the most affected Middle Eastern country since it has reported 439 cases, followed by Bahrain (256).