DOHA: Taking stock of the latest data released about Qatar’s sovereign and banking sector outlook, the Qatari economy is likely to perform “better than expected”. The Gross Domestic Product (GDP) is expected to grow by 5-6 percent in the next few years, according to the latest Emerging Markets Research by Barclays.
“Qatar’s changing growth drivers continue to shape its medium-term macroeconomic outlook. With gas production and exports operating at full capacity keeping hydrocarbon growth mute, planned increases in public spending in financial year 2013-14 should keep non hydrocarbon activity buoyant maintaining annual GDP growth in the 5-6 percent range in the next few years, in our view,” said the report. The report highlights that tightening LNG markets and the redirection of LNG shipments eastwards are benefiting hydrocarbon windfalls.
Qatar’s Current Account (CA) surplus rose further to 32.9 percent of GDP in 2012 compared to 30.3 percent in 2011 and Barclays expect the fiscal balance to have risen to 11.4 percent of GDP in financial year 2012-13 from 8.4 percent of GDP a year earlier.
“With limited supply growth on the horizon currently and continued strength of demand in Asia and emerging LNG importers, we expect pricing to remain broadly protected and reflect positively on Qatar’s fiscal and external positions,” added the report.
The report further said that Qatari banks’ liquidity eased while their funding profile improved considerably. And the loan-deposit ratio (LDR) fell to a two-year low of 106 percent in March 2013 compared to its 120 percent peak of June 2012, while net inter-bank borrowing positions almost halved to QR58bn.
Under its strategy recommendations the report said that (given the above) Qatar’s credit quality remains strong. This, however, is reflected in generally tight spread levels and a flat spread curve for the Qatar sovereign.
The Peninsula
