Interest rate support and low tax pressure help Qatar better GRI ranking

(MENAFN- Gulf Times) Favourable interest rate regime and low tax pressure helped Qatar improve its ranking by 10 positions to 21 in this year's Global Retirement Index (GRI).

"Strong economy and a benign economic climate in general in 2015 should improve the prospects for retirees" in Qatar, which is one of the biggest movers in 2015, GRI, prepared by Natixis, a global asset management company, said.

Among the GCC (Gulf Co-operation Council) countries; the UAE was ranked 25 (against 26 in 2014) and Kuwait 26 (40).

"Qatar improved significantly in the Finances in the Retirement sub-index partly due to a favourable interest rate environment (real interest rates increased from -0.3% to 4.09% this year) and extremely low tax pressure (only 2.9% of GDP)," it said.

Inflation has been moderate around 3% in 2014. Qatar's high national income per capita ($123,860) and a mere 0.5% unemployment rate push it higher in the Material Wellbeing sub-index.

Qatar, it said, has seen the quality of healthcare available to its retirees improve substantially over the past few years. Since 2006 the number of physicians for every 1,000 inhabitants has nearly tripled, from 2.8 to 7.7, to make it the top-ranked country in the world in this respect.

Moreover, the country has seen its wealth continue to increase; income per capita increased by nearly $1,000 in the last year alone, despite already having the highest income per capita.

Qatar should continue its "spectacular" run in 2015 as well with further expansion in the non-hydrocarbon sector, GRI said, observing that the construction sector has a lot on its plate with the Doha metro and the FIFA World Cup 2022 among many other big-ticket projects and that Barzan gas-to-liquids project should also propel the economy towards higher growth trajectory.
Although Qatar has been fairly immune from the sluggish global growth, the recent fall in oil prices may pose threats to the economy particularly because a lot of the liquefied natural gas (LNG) is tied to oil prices, it cautioned.
Qatar demonstrated significant economic resilience after the 2008 crisis and has established itself as one of the most solid economies in the Gulf region. Nevertheless the country faces environmental problems, which translated into a decreased score in the Quality of Life sub-index.
The strong economic performance of the country is underpinned by 6.3% GDP growth on the back of its non-hydrocarbon sector as services, construction and manufacturing.
However the hydrocarbon sector still makes up a major part of the economy for the world's largest exporter of LNG. The sector shrank in 2014 mainly because of the moratorium on further production in the North Field as the government imposed to assess the reservoir and it will likely remain till the end of 2015.
Further, the National Development Strategy (2011-16) called for more diversification and expansion of non-hydrocarbon sector so as to ensure sustainability and decreased reliance on the hydrocarbon sector.
"This will be valuable for retirees in the long run as it provides Qatar with different sources of revenue other than oil," GRI said.