(MENAFN- Kuwait News Agency (KUNA)) Qatar's GDP growth is likely to remain near 6.4 percent this year, increasing to 7 percent in 2015, the weekly report of the National Bank of Kuwait (NBK) said on Wednesday.
This is due to a combination of accelerating infrastructure spending, including on preparations for the World Cup 2022, expansion in the services sector as well as output gains from the completion of the Barzan gas production facility by the end of next year.
Having attained maximum LNG capacity of 77 million tonnes per annum (mtpa) in 2011 Qatar's LNG output has reached a plateau, the report said.
With a moratorium in place on further gas extraction projects in Qatar's giant North Field and conservative management of Qatar's aging oil fields, both LNG and crude oil production are not expected to contribute to economic growth over the next two years; hydrocarbon sector real growth has slowed from a high of 28.9 percent in 2010 to 0.1 percent n 2013.
According to the NBK report, the focus of economic growth has since shifted to the non-hydrocarbon sector and especially to execution by the government of the country's ambitious public investment program as articulated in Qatar's National Vision 2030.
Headline inflation increased by 3.4 percent in May, due largely to rising rental prices and costs in the transportation and communications categories. Rents, which comprise 32 percent of Qatar's CPI basket, have been rising-by almost 7 percent year-on-year in May, due to tight conditions in the residential market. Limited residential housing and burgeoning expatriate inflows-Qatar's population grew by 10.7 percent year-on-year in May-are the main reasons. Also, an increase in retail diesel prices by 50 percent helped push inflation in the transportation sector to 2.6 percent year-on-year.
As for the budget, surplus is forecast to narrow from 10.5 percent GDP in 2013 to 8.8 percent and 6.2 percent GDP in 2014 and 2015, respectively.
The NBK report said that credit growth in Qatar has been slowing over the last two years in line with a slowdown in loan demand by the public sector. Credit growth fell to 12.6 percent year-on-year in April, its slowest rate in 3 years. Public sector credit growth dropped to 9.7 percent year-on-year; the requirement for government entities to obtain Ministry of Finance approval for borrowing has also been a contributing factor. Meanwhile, credit to the private sector increased to 14.4 percent year-on-year, spurred on by a boost in lending to the real estate, general trade and consumption sectors especially. Private sector credit growth in 2014 has so far outpaced growth in 2013.
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