(MENAFN- The Peninsula)
Joel Johnson
|
The Peninsula
DOHA: The government's initiatives and efforts to boost non-hydrocarbon activities including supporting startups and emerging projects, and reforming the Real estate law are expected to provide a tailwind for businesses across Qatar, noted Fitch Solutions in its latest report.
Additionally, the decision to lessen service fees by up to 90 percent for the commerce, industry, business development, and consumer protection sectors in June 2024 paved the way for the demand spike.
However, the unfavorable base effects from the mega sporting tournament hosted by Qatar in 2022 - the World Cup is anticipated to“fade” stated Fitch, while the inflation eases, which decelerated from 1.6 percent y-o-y in December 2023 to 0.2 percent y-o-y in July 2024, will bode well for private consumption.
Meanwhile, the governments' furtherance on small-scale infrastructure projects and the North Field East LNG Expansion Project is expected to draw investment and construction activities across the country, said Fitch. The growth in this industry, however,“will remain much weaker than the pre-World Cup” average of 12.3 percent over the 2010-2019 time period.
High-frequency data directs to enhancing activity in sectors including the wholesale & retail trade, real estate, and construction. The data said,“This has been partly offset by slower growth in tourism and contracting manufacturing activity.”
However, in 2025, the growth is expected to accelerate to 2.2 percent due to stronger hydrocarbon and non-hydrocarbon activity.
The Fitch Solution's Oil and Gas analysts predict that hydrocarbon output growth will rise by 1.3 percent in 2025. This will boost the mining and quarrying sector and exports.
Market experts also highlight that the lower business fees and decline in the cost of borrowing will bolster lending activity and credit-based consumption. Analysts expect that moderate growth in the construction market will keep growth slower than the 2010-19 average of 4.7 percent.
On the other hand, the report mentions that“Credit growth and private consumption will depend heavily on the pace of interest rate cuts, which will be set by the actions of the US Fed.”
It further added,“Lower energy prices and/or output than we expect would weigh on exports and the government's revenues and spending. Meanwhile, a stronger or weaker pickup in construction activity would also affect our growth forecast, especially given that the sector employs more than 45 percent of the labour force.”
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