(MENAFN- The Peninsula)
Victor Bolorunduro
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The Peninsula
Doha: The investment outlook for 2024 in Qatar remains positive, as highlighted in a recent report by Ernst & Young.
The report indicates a strong focus on growth opportunities and capital accessibility.
According to the report, 75 percent of leading investors anticipate higher returns on investments in the next 12 months compared to the previous year, while 94 percent expect interest rates to either remain stable or decrease in 2024.
Despite this optimism, all investors mentioned that they were able to avoid losses during the adjustment period post-2022.
Qatar's success has been attributed to its strategic goals and ambitions, particularly the successful hosting of the FIFA World Cup in 2022.
This event served as a significant driver of growth over the past decade, leading to an impressive annual GDP growth rate of approximately 31.5% in 2022.
Although a period of adjustment was anticipated after the event, resulting in an 8.1% decrease in GDP in 2023 compared to the previous year's peak, Qatar managed to preserve much of its economic growth post-event, with the GDP in 2023 standing at a level around 20.9% higher than that achieved in 2021.
The sustained increase in economic output levels can be attributed to the country's ongoing efforts to stimulate economic growth and enhance its business environment.
Investors are cautiously optimistic about the national economy expanding by 4 to 6 percent, with the oil and gas sector anticipated to excel, as 80 percent foresee a boost from the North Field Expansion project.
The tourism and hospitality industry also garners positive views from 40 percent of respondents, owing to Qatar's heightened global presence through hosting major events, strategic marketing, and infrastructure enhancements.
Conversely, the real estate and construction sectors are perceived more cautiously, with 80 percent and 55 percent of participants, respectively, anticipating slower growth compared to the national average due to concerns of oversupply.
Nevertheless, the strong growth in tourism, exemplified by a record-breaking four million visitors in 2023, and initiatives such as the unified GCC tourist visa and relaxed residency permits, may help alleviate these concerns.
With respect to the investment environment and tactics, all respondents indicated successful investments in the previous year, and 75 percent anticipate increased returns in 2024. The majority are targeting a hurdle rate of 10 percent to 15 percent for upcoming ventures, while a smaller percentage are aiming for 15 percent to 20 percent. Overall, access to capital in Qatar is deemed favorable, although 40% encounter obstacles due to elevated interest rates, cautious banking practices, and foreign currency limitations.
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