DOHA: Qatar is experiencing a new wave of population growth, similar to what it witnessed during the economic boom from 2004 to 2009, says Qatar National Bank (QNB).
Population is projected to cross 2m by the end of this year and 2.2m next year, with an average 10.5 percent annual growth over the next two years.
This growth, driven by massive infrastructure projects and a high influx of expatriate workforce ahead of the 2022 World Cup could lead to higher inflationary growth, rise in house rents and more congestion on the roads, according to the weekly report issued by the QNB Group yesterday. The new and ongoing projects are expected to create more than 120,000 jobs a year over the next two years.
Inflation in the country is expected to hit 3.6 percent by the end of this year and 3.8 percent next year. The growing population has already pushed inflation up to 3.1 percent in the 12 months to August, largely owing to rising residential rents.
At that time, population grew at an average annual rate of 15.5 percent. On the back of both the global economic recession and the completion of major gas-related projects, population growth then slowed down in 2010-2011.
“Now, a new large population wave is hitting Qatar’s shores as the country embarks on its ambitious programme of infrastructure investment. According to QNB Group, this will have a large positive impact on non-oil growth, a moderate impact on inflation and produce significantly higher road congestion in the next few years as new expatriates drive up demand for goods and services in the economy,” said the report.
According to data released by the Qatar Statistics Authority (QSA), population growth began picking in mid-2012 and rose to double-digits in June 2013 (11.3 percent).
The huge influx of expatriate workforce to fill in the new jobs could result in a 10.5 percent annual average population growth over the next two years.
This has put Qatar once again at the top of the rankings for the world’s highest population growth. The large infrastructure spending will directly increase economic growth through higher demand for cement, steel, labour, and services.
Higher population growth will require additional investments in housing, roads, schools, among other things, thus pushing up economic growth in the years ahead. Overall, the direct and indirect impact of this rise of infrastructure spending is projected to push up real GDP growth this year to 6.5 percent and 6.8 percent in 2014.
This is also putting further pressure on the country’s road networks. With Qatar’s population more than tripling in the past 12 years, there has been a parallel increase in the number of vehicles on the roads (876,039 vehicles in 2012, compared to 287,500 in 2000).