BEIRUT, May 14 (Xinhua) -- The COVID-19 outbreak and unprecedented fluctuations in oil prices caused loss of about 25 percent in major Arab stock markets in the first quarter of 2020, found a study on Thursday.
The study, conducted by UN Economic and Social Commission for Western Asia (ESCWA) and the Union of Arab Banks, found that the heightened volatility in oil markets and the pandemic "have lowered investors' appetite for risk and decreased trading in stock markets, investment, tourism and remittances inflows, rendering future growth prospects bleak."
ESCWA Executive Secretary Rola Dashti called on Arab sovereign wealth funds to participate in boosting regional economic recovery.
"This would actually be a win-win measure, as shifting part of these funds' global investments towards Arab economies would ease the pandemic's repercussions and reduce rampant unemployment, while limiting Arab funds' exposure to the volatility of international financial markets," Dashti said.
As for the banks in the region, the ESCWA and the Union of Arab Banks expected liquidity constraints to adversely affect their deposit growth, funding and overall valuation.
They also expected that the credit to the private sector this year to contract by 14.5 billion U.S. dollars in Gulf Cooperation Council countries, and by 11.3 billion dollars in non-oil middle-income countries. Enditem
