Citi hosts webinar on post-coronavirus economic recovery

AMMAN —  Citi has hosted a two-day webinar forum under the theme “Navigating the Future: What’s next in a post-COVID19 world?” the company said in a statement sent to The Jordan Times on Wednesday.

When asked about the timing and shape of the economic recovery during the webinar,  David Livingstone, CEO of Europe, Middle East and Africa (EMEA) at Citigroup, said: “The Middle East might come out of the recession caused by the novel coronavirus [COVID-19] pandemic later than some other parts of the world. However, many regional economies will continue diversification efforts and most experts expect a sharper recovery in the Middle East region in 2021, which is slowing down somewhat. Citi believes that the global recovery may also shift over time.”

As for economic growth in the region, and prospects for global trade: “David warned against taking too pessimistic a view in the current depressed climate,” the statement said.

“I think we need to be careful about making assumptions at the trough,” he added.

Asked whether Citigroup is more cautious about lending to Middle East producers given lower oil prices, he said “on balance, no”.

Brent crude LCOc1 is trading at around $42 a barrel, recovering from recent lows due to output cuts by oil producers, but is still down from over $60 a barrel at the start of the year, as the coronavirus pandemic crimped demand.

Livingstone said the low cost base of many Middle Eastern producers gave them greater ability to withstand “lower for longer” oil prices than those in some other parts of the world.

“I think digitalisation of financial services has big growth opportunities, and we anticipate the EMEA region will be a market leader in transaction services in treasury management, and we will continue to invest in these types of activities to achieve growth across the region,” Livingstone said.

Livingstone also said that “capital markets are for funding the needs of corporates, and the wholesale funding of corporate balance sheets, whether it is for its own capital expenditure or organic growth or to fund shareholder return”.

Head of EMEA Emerging Markets at Citigroup, Atiq Rehman also spoke in the webinar. He said: “First of all, if you look at the global impact of the pandemic, with the whole world being affected, most industries worldwide have been hit by the crisis. Oil producing countries such as the UAE, Saudi Arabia, Kuwait and Qatar are reliant on oil resources in dealing with the COVID-19 crisis, which is different to other emerging markets.”

“Therefore, you need to consider several aspects including whether a country is heavily invested in oil or not, and whether a country is an oil importer or exporter.  Oil importer countries, for example, benefited from the recent reductions, by as much as half in their oil bills which makes a difference to their position, while those countries neutral to oil prices did not necessarily see the same benefits,” he added.

Citi CEO Michael Corbat recently said that there have been some “extraordinary actions” undertaken by financial authorities around the world, not least the US. 

He noted that US financial markets had responded and were “encouraged by the resilience” of government policy.

“We cannot predict when the pandemic ends, unless health experts around the world announce a vaccine,” Corbat added. 

“I believe that the global financial crisis will affect the clients in terms of global growth rates. Looking at growth rates around the world from the emerging markets, these markets grew 6 per cent prior to COVID-19, but developed markets grow at 4 per cent pre-COVID-19. Many governments around the world struggled making fiscal adjustments to build their respective economies, and found it difficult to adjust their spending programmes,” he said.

“There has also been an acceleration in digital, consumer business and institutional business as well as infrastructure due to COVID-19. We have moved forward to protect our customers by moving banking services online. Moreover, digital institutions continue to accelerate, and I think we can move the timeline forward to develop our commodities towards digitalisation. Government officials should accelerate technology as a reality, but there are significant fears in terms of jobs displacement,” he elaborated.