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The Effects of COVID-19 Pandemic on the Economies of the Gulf Cooperation Council States due to Low Oil Prices

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  • Khaled Abdalla Moh'd AL-Tamimi

Abstract

This paper shows the effect of a drop in oil price on the economic growth of GCC states as a result of the Covid-19 pandemic using monthly data for (2019/2020 M1 ¨C 2019/2020 M12) where oil price is an explanatory variable and economic growth is the affected variable. Because the economies of the GCC countries are centered mostly on oil, the spread of COVID-19 pandemic has become a serious concern since they depend on the outside world in diverse ways. The confirmed number of cases in the GCC countries is eliciting fear about security in these countries. This paper focuses on analyzing theoretical and empirical literature reviews to show the effects of oil price on economic growth and explaining this effect in GCC states for this period using the autoregressive distributed lag (ARDL) technique in Eviews program. This paper concluded that there are negative and significant effects of oil price on the economic growth of Kuwait and Qatar, but insignificant effects of oil price on the economic growth of Bahrain, Oman and the United Arab Emirates and a positive and significant effect of oil price on the economic growth of Saudi Arabia by using monthly data for (2019/2020 M1 ¨C 2019/2020 M12) at a significance level of 5%. Also, this paper reaches a recommendation of the GCC states to improve their economies through other sectors and not by relying on oil to enhance their economic growth.

Suggested Citation

  • Khaled Abdalla Moh'd AL-Tamimi, 2021. "The Effects of COVID-19 Pandemic on the Economies of the Gulf Cooperation Council States due to Low Oil Prices," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(1), pages 279-285, January.
    • Handle: RePEc:jfr:ijfr11:v:12:y:2021:i:1:p:279-285
    DOI: 10.5430/ijfr.v12n1p279
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    References listed on IDEAS

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    1. Claudiu Tiberiu Albulescu, 2020. "Do COVID-19 and crude oil prices drive the US economic policy uncertainty?," Working Papers hal-02509450, HAL.
    2. Claudiu Albulescu, 2020. "Coronavirus and oil price crash," Papers 2003.06184, arXiv.org, revised Mar 2020.
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