Qatar’s economy is resilient. It crossed all kinds of hurdles and withstood various adverse conditions. International Monetary Fund said in its recent update that significant fiscal and external buffers have enabled Qatar to successfully absorb the adverse shocks from the 2014-16 decline in oil prices as well as the siege.
The economy is in bright spot as Qatar’s state budget for 2019 features the first surplus in three years, expecting a substantial rise in revenues. Qatar has more than doubled its trade surplus year-on-year to QR18.99bn in October 2018.
Various forecasts say that Qatar’s economy is on the course for an overall growth of 2.6% with the non-hydrocarbon sector expected to see a growth of 5%. Economic activities are expected to accelerate further this year with a GDP growth of 3.2% and non-hydrocarbon growth of 5.3%. IMF has forecast that Qatar’s GDP will grow to 3.1% this year.
The good news is that Qatar’s inflation is projected to remain subdued. The Fitch Solutions, in its Qatar Economic Outlook, has revised downward its 2018 average inflation rate forecast from 0.9% to 0.5% due to deflationary pressures on housing and food and beverages. It expects average inflation to be at 1.1% this year, accelerating to 2.5% in 2020.
NBK’s ‘Qatar economic outlook’ noted that Qatar’s economic recovery is to gain further traction as the country’s oil and non-oil sector output will expand going forward. Supported by continued infrastructure investment, regulatory reforms and output gains in the gas sector, the economic growth is expected to gradually rise to 3% by 2020.
Underpinning economic activity is the government’s expansive public investment programme, which is now reaching an advanced stage with the FIFA World Cup. The non-hydrocarbon sector will continue to spearhead economic growth, rising by 4.1% year-on-year and 4.8% in 2019 and 2020, respectively, and supported by the government’s $200bn infrastructure investment programme under the Qatar National Vision 2030, the outlook said.
In the gas sector, the authorities’ intention to expand LNG production capacity by 43 percent to 110 million tonnes per annum (mtpa) by 2024 could see real output gains appear as early as 2020. Hydrocarbon sector real GDP growth should, therefore, rise from 0.3 percent in 2018 to 0.9 percent by 2020, it said.
It’s also notable that Qatar’s GDP at current prices (nominal GDP) has increased by 20.4% in the third quarter of 2018 over the third quarter of 2017. The quarterly GDP at current prices in Q3 of 2018 is estimated at QR180.90bn.
This represents an increase of 20.4 percent compared to the estimate of Q3 of 2017 placed at QR150.19bn. This shows that Qatar economy, despite existing and rising political risks across the world, is benefiting from the optimistic and farsighted approach of the authorities as growth is accelerating in a synchronised way across all sectors.
