The strong recovery will also trickle down to next year primarily because OPEC+ mandated oil production and higher oil prices improve business sentiment and attract additional investment. These favourable market conditions have successfully managed to decrease fiscal and external imbalances and have also helped export earnings to recover. However, World Bank has also mentioned that when it comes to the outlook in the medium term, some of the risks like slower global recovery, renewed Covid-19 outbreak and oil sector volatility still remains.

Issam Abousleiman, World Bank Regional Director for the GCC, told the media, “With high population growth and limited options in the private sector, the wage bill has become unsustainable in some GCC countries, as it is a large part of government spending and of the economy overall. Given their improved fiscal situation, this is an opportune time for GCC governments to accelerate their reforms agenda and reach the goals they set for themselves.”

The average GCC wage bill has managed to surpass the Organization for Economic Co-operation and Development’s (OCED) average in the last twenty years, except in Qatar and the UAE, the report mentioned. The civil service allowances in Saudi Arabia rose to SR148 billion in 2019 from SR44 billion in 2016, thereby forming more than a third of the Kingdom’s total wage bill.

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It said that by the end of 2021, Britain’s economy would still be 6.4 percent smaller than it was in the fourth quarter of 2019. According to the organisation, the UK allowed the virus to spread extensively in the country without undertaking proper lockdown measures.

The OECD added that the economic outlook would be worse if the virus spreads any further. In its report, it said, “A deterioration could prompt additional restrictions on economic activity and lead to a slower recovery. “New treatment methods or earlier than assumed distribution of a vaccine is a clear upside risk.”

The failure to conclude a trade deal with the European Union by the end of 2020 would entail serious additional economic disturbances in the short term and have a strongly negative effect on trade, productivity and jobs in the longer term,” it said.

A poll carried out by Reuters recently revealed that the UK’s economy will take at least two years to recover. Recent media reports also suggest that economy is heading for another contraction in the last quarter of the year. In the third quarter, the UK economy grew by 15.5 percent; however, the economy is likely to contract 2.7 percent this quarter.

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