Exodus of expatriates from the Gulf could continue until 2023, says S&P by Reuters

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DUBAI (Reuters) – The population in the Gulf Cooperation Council (GCC) states declined by about 4% last year due to the exodus of expatriates after the coronavirus crisis and falling oil prices, it said S&P Global (NYSE 🙂 Ratings in a report on Monday. The oil-producing region was hit hard last year as COVID-19 restrictions hit non-oil economic sectors, and lower oil prices and crude production cuts hit its main source of income. “We expect that the proportion of foreigners in the region will continue to decline until 2023 in relation to the national population, due to the moderate growth of the non-oil sector and the policies of nationalization of the workforce,” said S&P. The Gulf states rely heavily on foreign workers in sectors ranging from financial services to healthcare to construction, but efforts to nationalize the workforce to combat rising unemployment among nationals have accelerated in recent years. years. The overall GCC population is unlikely to return to 2019 levels of 57.6 million people through 2023, S&P said. “These changes could have repercussions for the regional economy and pose additional challenges to diversify away from its heavy dependence on the hydrocarbon sector in the long term, if they are not met with economic and social reforms that foster human capital,” he said. S&P estimated that the steepest population decline last year occurred in Dubai, the commercial center of the Middle East, where the impact of the pandemic on key employment sectors such as aviation, tourism and retail led to a population decline. 8.4%. In Oman, where the government has stepped up a long-standing policy, known as Omanization, in recent weeks to create jobs for its citizens, the expatriate population declined by about 12% last year, the agency said. The region’s largest economy, Saudi Arabia, saw its population shrink by 2.8% last year, and S&P estimates growth of 0.8% by 2023. The agency expects oil prices to remain at $ 50 per barrel this year and next, and increase to $ 55. starting in 2023. “As these levels are below the fiscal equilibrium oil price for all GCC sovereigns except Qatar, we expect governments to moderate investment spending public, which is the main driver of non-oil growth in the region, “he said.

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