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Satyendra Pathak
Doha
Qatar’s economic growth is expected to accelerate to 2.6 percent in 2019 from 1.6 percent in 2018 on the back of strong non-oil activities in the country, National Bank of Kuwait (NBK) has said in a report released on Wednesday.
According to the report, economic growth in Qatar has accelerated as the government advances its second National Development Strategy (NDS-2) that sees the private sector assume greater importance in driving diversification.
With the government’s expansive public investments bearing fruit, the report said, the country’s non-hydrocarbon sector is currently growing at a rate of 4.4 percent.
“Over the medium term, as infrastructure projects related to the FIFA World Cup 2022 and work on the broader Qatar National Vision 2030 advances, non-oil growth is expected to moderate to around 4 percent by 2021,” the report said.
“By this time, the private sector should have assumed a greater role in driving diversification through projects in sectors such as manufacturing, services, transportation and real estate,” it said.
The hydrocarbon sector will also get boost in 2020 from the commissioning of the $10 billion Barzan gas production facility. This should raise gas output by 12 percent and generate higher condensates and natural gas liquids (NGLs) volumes.
“The most significant contribution, however, will come over the medium-to-l ong term when LNG capacity expands by over 40 percent to 110 mtpa, with the addition of four new LNG trains by 2024,” the report said.
According to the report, Qatar recorded a surplus in 2018 amounting to 2.2 percent of GDP and it should improve further to 3.2 percent by 2021 amid continued spending restraint and stable energy prices.
The improvement in government finances will also have a positive bearing on public debt, it said.
“While the authorities accessed the debt markets in 2018 and early in 2019 securing favourable rates amid considerable investor demand to the tune of $24 billion, debt levels are expected to fall from 53 percent of GDP in 2018 to 41 percent of GDP by 2021,” the report said.
The external current account (CA) balance, which moved back into surplus in 2017 and reached an estimated 8.3 percent of GDP in 2018, should remain in surplus over the forecast period, the report said.
Notwithstanding a slight deterioration in 2019 to 6.4 percent of GDP on softer oil and gas prices, the report said, the CA will benefit in the medium-to-long term from higher gas exports and returns from QIA’s overseas assets.
Qatar’s fiscal position has strengthened since the authorities began the process of fiscal reform and consolidation by merging ministries and liberalising fuel prices, the report said.
QIA’s assets are estimated to be around $320 billion (167% of GDP), which is a sizeable buffer with which to absorb economic shocks such as the 2017 crisis, the report said.
The Qatar Central Bank (QCB) foreign reserves have recovered, touching pre-conflict levels of $33.5 billion, the report said.
The banking sector has overcome the shock of non-resident capital flight and tighter liquidity associated with the 2017 blockade, the report said adding foreign deposits have returned, private sector credit growth is at a near-three year high and overall liquidity has improved.
Doha
Qatar’s economic growth is expected to accelerate to 2.6 percent in 2019 from 1.6 percent in 2018 on the back of strong non-oil activities in the country, National Bank of Kuwait (NBK) has said in a report released on Wednesday.
According to the report, economic growth in Qatar has accelerated as the government advances its second National Development Strategy (NDS-2) that sees the private sector assume greater importance in driving diversification.
With the government’s expansive public investments bearing fruit, the report said, the country’s non-hydrocarbon sector is currently growing at a rate of 4.4 percent.
“Over the medium term, as infrastructure projects related to the FIFA World Cup 2022 and work on the broader Qatar National Vision 2030 advances, non-oil growth is expected to moderate to around 4 percent by 2021,” the report said.
“By this time, the private sector should have assumed a greater role in driving diversification through projects in sectors such as manufacturing, services, transportation and real estate,” it said.
The hydrocarbon sector will also get boost in 2020 from the commissioning of the $10 billion Barzan gas production facility. This should raise gas output by 12 percent and generate higher condensates and natural gas liquids (NGLs) volumes.
“The most significant contribution, however, will come over the medium-to-l ong term when LNG capacity expands by over 40 percent to 110 mtpa, with the addition of four new LNG trains by 2024,” the report said.
According to the report, Qatar recorded a surplus in 2018 amounting to 2.2 percent of GDP and it should improve further to 3.2 percent by 2021 amid continued spending restraint and stable energy prices.
The improvement in government finances will also have a positive bearing on public debt, it said.
“While the authorities accessed the debt markets in 2018 and early in 2019 securing favourable rates amid considerable investor demand to the tune of $24 billion, debt levels are expected to fall from 53 percent of GDP in 2018 to 41 percent of GDP by 2021,” the report said.
The external current account (CA) balance, which moved back into surplus in 2017 and reached an estimated 8.3 percent of GDP in 2018, should remain in surplus over the forecast period, the report said.
Notwithstanding a slight deterioration in 2019 to 6.4 percent of GDP on softer oil and gas prices, the report said, the CA will benefit in the medium-to-long term from higher gas exports and returns from QIA’s overseas assets.
Qatar’s fiscal position has strengthened since the authorities began the process of fiscal reform and consolidation by merging ministries and liberalising fuel prices, the report said.
QIA’s assets are estimated to be around $320 billion (167% of GDP), which is a sizeable buffer with which to absorb economic shocks such as the 2017 crisis, the report said.
The Qatar Central Bank (QCB) foreign reserves have recovered, touching pre-conflict levels of $33.5 billion, the report said.
The banking sector has overcome the shock of non-resident capital flight and tighter liquidity associated with the 2017 blockade, the report said adding foreign deposits have returned, private sector credit growth is at a near-three year high and overall liquidity has improved.
