(MENAFN- The Peninsula)
Doha: The restoration of ties between Qatar and the four Arab countries will provide a range of benefits to the local economy, noted a report released by PwC Middle East recently.
The normalisation of relations will boost Qatar’s tourism, trade, aviation, banking and financial services sector.
“Although Qatar’s economy was resilient during the years of regional tensions, the restoration of full travel and trade ties with the Quartet (KSA, UAE, Bahrain and Egypt) has a range of economic advantages,” noted the third edition of Qatar Economy Watch report.
It added that restoration of ties has significantly de-risked the economy and is reviving bilateral commercial opportunities, including aviation and the 2022 World Cup.
The number of tourists coming from GCC countries is expected to rise significantly in coming months. GCC visitors play an important role in Qatar tourism sector. According to 'Qatar Monthly Statistics’ report by the Planning and Statistics Authority, the visitors from GCC had 40 percent share in total visitors’ arrivals in May this year.
“The tourism sector will also benefit, as visitors come not only by air but also by land from Saudi Arabia. Traditionally, Saudi visitors have comprised about half of all tourists to Qatar and an even larger share of tourism revenue,” said the report.“So far, the pandemic means only a handful of Saudis have visited since the border reopened, notably during the Eid holiday, but there is significant scope for this to increase rapidly in the second half of the year,” added the report.
There are also opportunities to resume exports to the quartet and source imports from these countries. This enhances Qatar’s appeal for foreign investors, as a regional hub for services and manufacturing.
For financial markets, the reconciliation reduces political risk concerns and should make it easier for companies in Qatar to borrow at favourable rates.
According to the report, the most immediate benefit is to Qatar Airways, which has been able to both relaunch lucrative routes to quartet cities and use their airspace, equating to significant savings in fuel costs and flight times across many routes.
“The pandemic remains the limiting factor, but Qatar Airways is expected to emerge in a strong position as the aviation sector recovers,” said the report. “It managed to maintain its international routes, which was facilitated by the fact that its fleet contains a larger proportion of medium-sized planes, making it more flexible at a time when the largest planes like A380s are too expensive to fly at limited capacity.”
Qatar Airways has won goodwill internationally by keeping routes open, including to help people repatriate during the crisis.
Banks and other financial institutions will benefit as they would be able to do cross-border investments in the coming years.
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