(MENAFN- The Peninsula)
By Sachin Kumar | The Peninsula
Doha: Qatar's economy is on the path of recovery after facing challenging situation caused by COVID-19 pandemic outbreak. The economic outlook for the local economy for the current year is 'significantly positive', according to Qatar Central Bank (QCB).
In its latest Annual Report, the central bank noted that higher economic activities due to increasing COVID-19 vaccination rate, rising global oil prices and growing natural gas production will help to boost Qatar's economic growth.
“In the middle of a global economic contraction due to the outbreak of COVID-19, Qatari economy too contracted in 2020. Despite this contraction in real GDP against an expansion in the preceding year, the economic outlook for 2021, however, remains significantly positive,” said QCB in its Annual Report 2020.
“Favourable movements in global oil prices, growing natural gas production, restoration of economic activities as the COVID-19 vaccine rolls out across the globe and the removal of the fiscal strain due to the removal of economic blockade in January 2021 are likely to provide an overall macroeconomic stability in 2021,” noted the report.
In the GCC region, Qatar was the least affected among GCC economies by the pandemic that has led to an unprecedented contraction in economic activities globally in 2020.
As per the latest estimate of the International Monetary Fund (IMF), Qatar's GDP contracted the least in the GCC region in 2020 and forecast a robust growth in 2021.
Lifting of economic blockade in January 2021 and North Field expansion would provide a fillip and boost to the construction sector during the construction phase and beyond. Similarly, some other sectors such as electricity would also get a boost given the estimated power requirement in the project.
“On balance, economic outlook for 2021 is positive, as against the contraction in real GDP by 3.7 percent in 2020. The Planning and Statistics Authority and multilateral agencies such as the IMF share this optimism about Qatar's economic outlook, which all project a real GDP growth of above 2 percent during 2021,” said the report.
In 2020, GDP at current prices decreased by 16.7%, reflecting significantly low gains from oil exports. This was due to the sharp fall in global oil demand and prices primarily caused by COVID-19 mitigation measures that restricted travel and transport, and the price war within OPEC+ happening simultaneously.
Oil prices, however, improved significantly by the end of 2020 on account of market expectations that OPEC+ will delay its previously planned output increases in January 2021 and news related to the efficacy of several COVID-19 vaccines across the globe.
Going forward, crude oil prices are likely to continue improving, aided by OPEC+ decision to cut production and expected higher demand post-pandemic, which would provide a boost to domestic GDP growth, said QCB.
MENAFN19092021000063011010ID1102820901
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.