The widespread disruption to normal life and business activities due to the COVID-19 pandemic has led to warnings from IMF and other organizations of an upcoming global recession. The GCC countries that rely on oil revenues have been hit harder as oil prices reached record lows due to a combination of falling demand and increased supply as OPEC+ alliance partners failed to reach a consensus in March 2020 on production cuts. The OPEC+ agreed to a deal on 12 April, 2020 for a daily production cut ~10 million barrels but price outlook for oil price remains weak in light of weaker demand.
COVID-19
A decline in oil prices
Source: *WHO, as at 14 Apr 2020, **OPEC.org
While the immediate impact of the economic slowdown is being felt in the consumer-facing industries, other industries are also grappling with cash flow issues that may impact their survival.
We can learn from the events that transpired between 2008-09 on account of global financial crisis and prepare better to encounter the slowdown