NEW HEADACHE | Page 4 China’s fledgling car rebound faces risks of parts shortage Friday, April 17, 2020 Sha’ban 24, 1441 AH VIRUS LOCKDOWN : Page 10 UK headed for GULF TIMES historic slump as retail sales slide, BUSINESS companies close Opec sees demand for its GCC commerce ministers crude dropping to lowest in stress need to promote 30 years Bloomberg London Opec expects demand for its crude will fall to the lowest in three decades as the food security in region coronavirus outbreak freezes the global economy, underscoring the urgency of its he GCC commerce ministers have The meeting also highlighted efforts promised production cuts. highlighted the need to promote across GCC countries to address the re- Just under 20mn barrels a day will be Tfood security, and ensure the con- percussions of the pandemic and to miti- needed on average from the Organisation of tinuity of food supply chains and medical gate its impact on all levels. Petroleum Exporting Countries in the second supplies for residents of Gulf countries, The meeting also featured discussions quarter, according to a monthly report from in light of the partial and complete lock- on the action plan that Kuwait proposed the group. It hasn’t pumped this little crude downs that have been implemented in on the importance of establishing a GCC since early 1989. various countries. food security system, and the availability Opec and its allies agreed massive HE the Minister of Commerce and In- of a sufficient stock of medical supplies in production cuts amounting to 10% of global dustry Ali bin Ahmed al-Kuwari partici- times of crises. supplies over the weekend, as governments pated in the Second Extraordinary Meet- Participants also agreed on the need extend lockdowns to contain the pandemic, ing of Ministers of Commerce in the Gulf to identify existing laws on food security emptying out roads, drastically reducing Cooperation Council (GCC). across GCC member states, to pave the flights, and bringing many economic The meeting was held via video conference way for the adoption of a unified draft law activities to a halt. to follow up on recent developments across on food security and to secure a strategic The report released on Thursday from the the region and coordinate efforts to contain stockpile. group’s secretariat in Vienna illustrates why the economic repercussions of the outbreak The meeting also discussed the recom- they’ll need to deliver the pledged reductions of the novel Coronavirus (Covid-19). mendations put forward by the Technical in full. Discussions touched on the outcomes Council of the GCC Standardisation Or- Even if Opec members fully implement their and recommendations put forward dur- ganisation and the General Secretariat’s share of the agreed cutbacks, they’d still be ing the meeting of the Undersecretaries role in following up on the implementa- producing more than the market requires in of the Ministries of Commerce in GCC tion of council’s recommendations to the second quarter. countries, which was held on April 9, also guarantee the interests of all member With perfect compliance, the 13 nations via video conference. states. would be pumping about 23.4mn barrels a The meeting discussed the topics on In light of the discussions, participants day, or roughly 3.7mn more than the “call on the meeting’s agenda, particularly the stressed the importance of forming a Opec.” issue of food security, and considered team of liaison officers representing the Things could be even tougher for the the adoption of unified draft law on the ministries of commerce in GCC states organisation than it’s forecasting. subject, and the recommendations of the to follow up on the latest developments, While the group slashed forecasts for Technical Council of the GCC Standardi- exchange information and coordinate in global oil demand this year, their estimates sation Organisation to address the crisis order to overcome challenges hindering are still considerably more optimistic than and its repercussions. the flow of goods between member coun- those of the International Energy Agency, The meeting highlighted the excep- tries, and propose appropriate solutions. the institution that advises consuming tional circumstances that countries The GCC commerce ministers ex- nations. around the world are facing, and the im- pressed satisfaction at the outcomes and Opec sees world oil demand contracting by pact on economic and trade sectors as recommendations to combat the pan- 6.8mn barrels a day in 2020, while the Paris- well as efforts to restore balance to the demic, and hoped for an end to the crisis based IEA on Wednesday projected a slump global economy and international and and a global and regional economic re- HE the Minister of Commerce and Industry Ali bin Ahmed al-Kuwari participates in the Second of just over 9mn barrels a day. regional trade. covery. Extraordinary Meeting of Ministers of Commerce in the GCC via video conference. Qatar government debt ‘mitigated’ Hamad Port expansion to support Qatar’s by ‘credible’ currency peg: Moody’s non-hydrocarbon growth, says Moody’s By Pratap John GDP in 2019. Our assessment of Qatar’s fiscal Business Editor strength is also based on the government’s By Pratap John “The impact of lower prices will prudent budgeting, which has yielded Business Editor take time to filter through in Qa- persistent fiscal surpluses in the past while tar as the hydrocarbon exports are Qatar’s high government debt and a also softening the negative fiscal impact mainly liquefied natural gas (LNG) relatively high share of foreign-currency during the periods of oil price declines,” atar’s plans to accelerate sold on long-term contracts with debt is “mitigated by a credible” currency Moody’s said. the Hamad Port expan- pricing that follows oil prices with peg to the dollar, backed by its large external The structural shift in the oil market Qsion project by bringing a three to six month lag. For Qa- assets and the central bank’s foreign since 2014 “eroded” Qatar’s hydrocarbon it forward to 2020 from an initial tar, this means that the bulk of the reserves, Moody’s Investor Service has said income, which led to a “significant fiscal target date of 2030 will support fiscal impact of lower oil prices in an update. deterioration” in 2015-17, highlighting the the country’s non-hydrocarbon will materialise during the second Qatar’s ‘a1’ fiscal strength is above the initial degree of vulnerability to such oil price growth over the next several years, half of 2020 and in 2021,” Moody’s score of ‘a3’, taking into account several declines. Moody’s Investor Service has said said. considerations, it noted. “However, the fiscal breakeven oil price in an update. “We expect that lower oil prices According to Moody’s, government revenue of around $55/barrel implied by the 2020 On completion, the Hamad Port will reduce government revenue is mostly denominated in foreign currency, budget is lower than for most other GCC will be one of the largest deep- by about 5% of GDP in 2020 and including budgetary hydrocarbon revenue sovereigns and below our medium-term oil water seaports in the world with another 2% of GDP in 2021. We and extra-budgetary investment income price assumptions,” Moody’s said. a capacity of 12mn twenty-foot in turn expect Qatar to post a fis- from offshore assets held by the Qatar The large assets accumulated during equivalent units (TEUs), Moody’s A ship decks at the Hamad Port in Doha (file). On completion of its cal deficit of 1.6% of GDP in 2020, Investment Authority. periods of high oil prices and managed by said. expansion, the Hamad Port will be one of the largest deep-water which will widen to 4.1% of GDP in Finally, entities included in its calculation the sovereign wealth fund mostly offshore “However, these plans are likely seaports in the world with a capacity of 12mn twenty-foot equivalent 2021, compared to a surplus of 1% of other non-financial public-sector debt were available as a fiscal buffer since oil and to be delayed due to the effects units, Moody’s said. of GDP 2019. have generally been profitable and the gas prices fell in 2014, but the government of the coronavirus pandemic,” “This forecast assumes that the risk of their liabilities crystallising on the has deliberately chosen debt financing over Moody’s said. to 126mn tonnes per year from expect the hydrocarbon sector to decline in oil prices will be partly government’s balance sheet is likely to be asset liquidation. In the medium term, Moody’s 77.5mn tpy. remain a drag on growth until at offset by lower overseas spend- lower than the headline number would This led to more than a doubling of Qatar’s expects Qatar’s overall growth to “We expect real hydrocarbon least 2025, when we expect the ing by Qatar Petroleum, which suggest. government debt between 2014 and 2019, accelerate during 2022-2024 be- output to remain flat in 2020, af- new LNG trains to start coming on will allow the national oil and gas The national airline, Qatar Airways, which Moody’s said. cause of the country’s hosting of ter an unexpected decline of 1.9% stream,” Moody’s said. company to transfer more rev- Moody’s expects to post losses as a result of “We estimate that some of this additional the FIFA World Cup in 2022 and in 2019, whereas we are assuming Moody’s has reduced its year- enue to the budget. The forecast the global coronavirus pandemic, has debt borrowing was used to inject equity into the the investment spending on the that the non-hydrocarbon sec- average assumptions for the Brent also assumes that during 2020 the of only around 3% of GDP.