DOHA: Powered by large-scale public infrastructure spending, Qatar’s real gross domestic product (GDP) is forecast to grow by 6.5 percent in 2013 and 6.8 percent in 2014, according to ‘Qatar Economics Insight 2013’ report published by QNB Group.
The report also forecast the current account surplus of the energy-rich economy to remain high at 34.1 percent of GDP on average in 2013-2014 as the traditional hydrocarbon exports receipts are expected to be boosted by exports of Gas-to-Liquids (GTL), petrochemicals and fertilisers.
However, the fiscal surplus is projected to narrow at 4.7 percent of GDP in 2013 and 2.6 percent in 2014 owing to increased infrastructure investment while revenues are mildly reduced by lower oil prices.
Fiscal surplus is a situation when governments’ total revenue is more than its total expenditure during a particular period of times, usually one year, which is also know as fiscal year.
The high public spending, as part of the build-up towards the 2022 World Cup, is expected to accelerate the growth of the economy. This will drive growth in construction and services despite a slowdown in the oil and gas sectors.
The report, which highlights Qatar’s strong growth outlook, says that the economic impact of the World Cup is already being felt as accelerated infrastructure investment has led to a rapid increase in job creation. This has led to an influx of expatriate workers to fill the growing requirement for labour force.
Population growth began picking up in mid-2012 and reached double digits in June-2013 (11.3 percent), the world’s fastest rate.
Inflation is projected to increase moderately by 3.6 percent this year and 3.8 percent in 2014. The expanding population will increase rents and domestic demand, resulting in moderately higher prices.
The banking sector will benefit from the strong overall performance of the economy as rising infrastructure spending provides for ample credit opportunities. Coupled with further global expansion by local banks, this will maintain healthy profits.
The complete report is available on the group’s website.