Qatar’s economy is projected to expand by 6% this year, about half percent higher than in 2012, and by 4.6% in 2014. The figures are based on those presented in June 2013 by the Ministry of Development Planning and Statistics in its updated Qatar Economic Outlook 2013-2014.
The upward revision for 2013 reflects higher than anticipated growth in both hydrocarbon production and in non-oil and gas activity. Hydrocarbon growth in 2013 is set to benefit from higher gas output, which will more than offset the impact of a slight decline in oil production. Services sector will continue to be the main driver during the current year.
Qatar foresees a likely fall in hydrocarbon production pulling its growth down next year, despite solid expansion of the non-oil and gas economy. Huge investment in infrastructure and real estate, sizeable fiscal spending and steep population growth are poised to sustain growth momentum.
The update expects moderate inflation in 2014 of 3.5%, a little higher than the 3.2% projected in 2013.
The Minister of Development Planning and Statistics His Excellency Dr. Saleh Mohamed Salem Al Nabit said, “The overall economy is set to expand during the foreseeable future, at a time when the profile of the non-oil and gas economy will continue to become more pronounced.” While population growth and fiscal spending were stoking growth, new business opportunities were also being carved out in areas such as financial services, transport and communications, and tourism, he noted.
Measures to curb abuses of market power in local consumer markets are expected to help keep price rises in check, and imported inflation is seen low. Upward pressure on residential rentals is likely, but may soften. And although rising material costs will exert upward pressure on project costs, the impact is unlikely to spill over into consumer prices.
The government’s fiscal position will remain solid, with an overall surplus projected in 2013 and 2014.
However, the surplus is likely to nudge down next year as capital spending, related to the country’s infrastructure programme, steps up. H.E Al Nabit observed that, “While a robust outlook for oil prices is central to our forecasts, we see downside risks as remote and this means that we fully expect to maintain adequate fiscal space in the upcoming years.”
The document noted Qatar’s external position will remain healthy and a current account surplus of close to 23% of GDP is expected in for 2014.
@The Peninsula