The Banking Executive Magazine - March 2021

Global Economic Outlook 2021 contribute to the economy’s slow growth, even if the U.A.E does man- age to capture a larger share of the European oil market. OTHER COUNTRIES WORTH MENTIONING 1. Turkey: Turkey’s case in 2020 is an interest- ing one to say the least. Even though it contracted by 3.8%, and even though its Lira was heavily devalued when measured against the US dol- lar, Turkey still managed to avoid a bigger contraction as a result of in- tense policies oriented towards in- creasing credit. Nevertheless, Turkish businesses still suffered from the pan- demic, especially those affiliated with the touristic sector and those that had limited solvency before the currency devaluation. And even though Turkey’s policies were an overall success, the nations’ re- stricted monetary reality left it inca- pable of carrying out all of the procedures it had originally planned. 2. KSA: In comparison, Saudi Arabia has had a relatively less rosy year. Stringent lockdowns coupled with a decrease in oil prices throughout 2020 has left the economy in shambles, with a growth rate of -5.4%. While some in- vestors are optimistic that KSA’s economy is set for a rebound in 2021, others are warry seeing that growth in Saudi Arabia will largely depend on the recovery of global de- mand and the price of oil, which is expected to face another dip. The pandemic may also leave quite a lasting scar in the economy as the in- stability of financial markets and the country’s rising public debt might hamper the KSA’s plans to increase economic diversification in the near future. Still, save an exogenous shock or increased non-compliance by OPEC+ countries, KSA’s economy is set to grow by 3.1% in 2021. 3. Russia: Following its worst recession since World War II, the Russian economy is set to contract by 3.6% in 2020, with the hardest hit industries being retail, manufacturing, and construc- tion. The pandemic has had a spillover effect on most Russian livelihoods, with the shrinking of businesses estimated to thrust 130 million people into extreme poverty by 2021. The Russian government, however, acted swiftly and have put in place several countercyclical fis- cal policies raging from substantial macro-monetary support for strug- gling corporations to targeted social safety net policies meant to alleviate the burden of carried by the most vulnerable. Nonetheless, Russia was still helpless to combat certain issues, such as disrupted trade with the EURO zone -its largest trading part- ner- due to the pandemic’s effect on global value chains. In 2021, Russia is expected to start a strong rebound of 3%, followed by a complete re- covery in 2022 when it is estimated to grow by a further 3.9%. Russia’s relative ease in rebounding from this pandemic lies in its still largely un- fulfilled potential, with a gradual shift towards more technological driven manufacturing the basis for Russia’s expansion in the coming few years. GLOBAL TRENDS: 1. Trade We know that trade tends to be volatile and extremely susceptible to such crises (Bussiere et al. 2013). In ISSUE 147 MARCH 2021 the BANKING EXECUTIVE 29