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SLUGGISH HYDROCARBON SECTOR

Qatar economic growth slows to 6pc in 2012

Doha, April 24, 2013

 

Qatar’s economic growth in 2012 slowed to 6.2 per cent year-on-year in real GDP terms down from 13 per cent y/y in 2011as growth in hydrocarbon output stalled, according to a report by National Bank of Kuwait.
 
The drop in economic growth was mainly due to the sluggish hydrocarbon sector which slowed from 15.8 per cent y/y in 2011 to 1.7 per cent y/y in 2012, the top Kuwaiti lender said citing data from the Qatar Statistics Authority.
 
In contrast, the non-hydrocarbon GDP grew by a robust 10 per cent last year. The nominal GDP, meanwhile, expanded by 12 per cent to reach QR700bn ($192 billion), confirming Qatar’s place as the third largest economy in the GCC, the report added.
 
During the last 5 years, the Qatari real economy has grown by an average of 15.5 per cent per year as the country’s gas and LNG output expanded. However, with the attainment of maximum production of 77 million tonnes per year by the end of 2011, real hydrocarbon GDP growth has consequently subsided, it stated. 
 
Given the moratorium on new gas projects in the North Field until next year at the earliest and declining yields from the country’s maturing oil fields, future expansion in the hydrocarbon sector will largely be determined by increases in output resulting from the completion of the Barzan gas production facility and from any enhancements to existing oil fields.
 
The Barzan facility is scheduled to begin operating in 2014 and produce gas for domestic consumption. Crude oil production declined by more than 10 per cent during 2012 and is currently around 0.736 million barrels per day (mbpd).
 
In contrast, the non-hydrocarbon sector grew by approximately 10 per cent y/y for the second year running on the back of robust growth in both the industrial (manufacturing and construction) and services sub-sectors. Both of these expanded by 10 per cent y/y, said the NBK report.
 
On the manufacturing sector, the Kuwaiti lender said the development of the industry, which includes downstream processes such as gas-to-liquids (GTLs), petrochemicals and fertilizer production, has been proceeding apace and is a major focus of Qatar’s diversification strategy. 
 
With the expansion of the 140,000 bpd Pearl GTL facility due to be completed this year, Qatar is set to cement its position as the world’s largest producer of GTLs (alongside its status as the world’s largest LNG exporter). As a share of nominal GDP, manufacturing has increased to 9.8 per cent.
 
With regard to the construction sector, the report said it should receive a further boost with Qatar’s ambitious pipeline of infrastructure projects such as the $45 billion Lusail development and the $35 billion rail and metro network as well as World Cup-related projects.
 
Meanwhile, the services sector has also expanded significantly. Led by government and financial services but also including retail, transport and hospitality, services grew by more than 9 per cent for the second consecutive year. 
 
"Government services as a share of GDP, for example, increased from 7.4 per cent in 2011 to 8.7 per cent in 2012. The overall trend in growth of the services sector is also likely to be maintained over the next few years, benefitting from expansive government investment and burgeoning population growth," said the report. 
 
NBK pointed out that the official estimates of the performance of the Qatari economy in 2012 supported its own projection of real GDP growth moderating to 5 per cent in 2013 and 2014. 
 
"The non-hydrocarbon sector will be the main driver of growth, expanding by 8 per cent and 7.6 per cent during 2013 and 2014, respectively," it added.-TradeArabia News Service



Tags: Qatar | economy | NBK | GDP | hydro-carbon |

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