(MENAFN- The Peninsula) By Satish Kanady I The Peninsula
Qatar's economic recovery is to gain further traction as the country's oil and non-oil sector output will expand going forward. Supported by continued infrastructure investment, regulatory reforms and output gains in the gas sector, Qatar's economic growth is expected to gradually rise to 3.0 percent by 2020.
Qatar's economy has been performing well, with output expected to increase by an annual average of 2.7 percent over 2018- 2020 from 1.6 percent in 2017 on the back of gains in the nonhydrocarbon sector, especially in manufacturing and construction, and in the gas sector, where the authorities are intent on expanding LNG capacity by 43 percent by 2024. Underpinning economic activity is the government's expansive public investment program, which is now reaching an advanced stage with the FIFA World Cup only three years away, NBK's ‘Qatar economic outlook' noted.
According to NBK analysts, Qatar's public finances are also on a firmer footing, with the country's first fiscal surplus in three years expected in 2018, at 3.1 percent of GDP, and its foreign reserves back on the rise, thanks to higher oil and gas prices and restrained public expenditure growth. Moreover, businesses and investors appear to have regained their confidence in Qatar's economy: non-resident deposits are returning, private sector credit growth, led by corporates, is in the double digits, and the stock market just ended 2018 posting the highest yearly gains in the region at 21 percent.
The non-hydrocarbon sector will continue to spearhead economic growth, rising by 4.1 percent y/y and 4.8 percent y/y in 2019 and 2020, respectively, and supported by the government's $200bn infrastructure investment program under the auspices of the Qatar National Vision 2030. P03
In the gas sector, the authorities' intention to expand LNG production capacity by 43 percent to 110 million tonnes per annum (mtpa) by 2024 could see real output gains appear as early as 2020—Qatar Petroleum (QP) has already issued its first tender for drilling rigs. Hydrocarbon sector real GDP growth should, therefore, rise from 0.3 percent in 2018 to 0.9 percent by 2020.
The country's banking sector has recovered from post-blockade capital flight, while credit growth continues to be robust. Foreign bank liabilities—deposits from overseas banks, non-residents and debt securities—have increased by about 20 percent, as of October 2018, with non-resident inflows in particular recovering after bottoming out at QR135bn in November 2017, a drop of 27 percent from pre-blockade levels. Growth in the overall and private sector deposit base has been weak, though, running at 1.5 percent y/y and 0.5 percent y/y in October 2018, respectively.
Qatar's fiscal balance is expected to shift into a surplus of 3.1 percent of GDP in 2018, following three consecutive years of deficits. While this is due primarily to higher oil and gas revenues following the increase in energy prices, restrained expenditures and some increase in non-oil revenues are also responsible. The fiscal deficit has been financed primarily by domestic debt, although Qatar returned to the international bond markets in April 2018 with a successful $12bn sale. There were no shortages of takers. The external current account balance, which moved into a surplus in 2017, also improved. Looking ahead, while energy prices are expected to be softer in 2019-20, it is unlikely that either account will slip back into a deficit.from business page1
In the gas sector, the authorities' intention to expand LNG production capacity by 43 percent to 110 million tonnes per annum (mtpa) by 2024 could see real output gains appear as early as 2020—Qatar Petroleum (QP) has already issued its first tender for drilling rigs. Hydrocarbon sector real GDP growth should, therefore, rise from 0.3 percent in 2018 to 0.9 percent by 2020.
The country's banking sector has recovered from post-blockade capital flight, while credit growth continues to be robust. Foreign bank liabilities—deposits from overseas banks, non-residents and debt securities—have increased by about 20 percent, as of October 2018, with non-resident inflows in particular recovering after bottoming out at QR135bn in November 2017, a drop of 27 percent from pre-blockade levels. Growth in the overall and private sector deposit base has been weak, though, running at 1.5 percent y/y and 0.5 percent y/y in October 2018, respectively.
Qatar's fiscal balance is expected to shift into a surplus of 3.1 percent of GDP in 2018, following three consecutive years of deficits. While this is due primarily to higher oil and gas revenues following the increase in energy prices, restrained expenditures and some increase in non-oil revenues are also responsible. The fiscal deficit has been financed primarily by domestic debt, although Qatar returned to the international bond markets in April 2018 with a successful $12bn sale. There were no shortages of takers. The external current account balance, which moved into a surplus in 2017, also improved.
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