Qatar economy forecast to grow at 5pc
Doha, February 23, 2013
The real GDP growth in Qatar is expected to slow to 5.0 per cent and 4.9 per cent in 2013 and 2014 respectively, according to a new report.
The real non-oil GDP will grow by 8.0 per cent and 7.6 per cent respectively in the next two years, said the National Bank of Kuwait (NBK) strudy.
Meanwhile, inflation in Qatar is forecast to pick up in 2013 and 2014 and reach 3.4 per cent y/y and 4.0 per cent y/y, it said.
Qatar is expected to have had its first full year of maximum LNG output (77 million tonnes) in 2012. This will cap a remarkable decade of investment and expansion in the country’s gas sector which has delivered double-digit average annual growth and seen Qatar assume the mantle of the world’s largest LNG exporter and highest per capita income country, the report said.
In view of the completion of LNG expansion and the moratorium on further gas exploration in the North Field until at least 2014, growth is set to moderate substantially. As a result, real GDP is forecast to slow to 5 per cent during 2013-14. Moreover, pending enhancement and further development of the country’s aging oil fields, which is scheduled over the next few years, oil production is likely to remain below potential, the report said.
Economic expansion will therefore be driven largely by developments in the non-hydrocarbon sector - manufacturing, construction and services especially. Manufacturing output will be boosted by the attainment of full production at the 140,000 bpd Pearl gas-to-liquids (GTL) facility during 2013- 14 as well as further expansion in petrochemical and fertilizer production, of which Qatar Fertilizer Company’s Qafco-6 project and Qatar Petrochemical Company’s (Qapco) low density polyethylene plant LDPE3 are notable examples.
Meanwhile, as the government proceeds with realizing its National Development Strategy 2011-2016, a pipeline of major infrastructure projects - including the $45 billion Lusail development, the $17.5 billion New Doha International Airport and a host of road, railway and associated World Cup construction projects - will, alongside the government’s broader efforts to position Qatar as a financial services and tourism hub, gain increased momentum, the report said.
While inflation is expected to repeat its performance of 2011 and average 1.9 per cent y/y in 2012, it is forecast to pick up in 2013 and 2014 and reach 3.4 per cent y/y and 4.0 per cent y/y, respectively. This is largely due to a turnaround in the rental component of the consumer price index, which has, since the middle of 2012, posted consecutive monthly increases.
Demand in that sector, spurred on by an expansion in the workforce, finally looks to be rising to meet the oversupply that has characterized the Qatari real estate market since the financial crisis, the report said.
In spite of relatively muted global food and commodity prices and a stronger US dollar, which are tempering inflation for the moment, domestic pressures stemming from rising consumer demand and expansive fiscal and monetary policies are likely to feature in the medium term inflation outlook, it said.
After posting a record fiscal surplus in 2011-12, Qatar’s budget balance is expected to narrow in 2013 and 2014, to 8.2 per cent and 7.0 per cent of GDP, respectively, as current and capital spending increases are expected to outpace revenue growth.
The current account surplus is also projected to decline over the next two years, from 29 per cent of GDP in 2012 to 22 per cent of GDP in 2014, reflecting rising imports and softer hydrocarbon prices. – TradeArabia News Service