DOHA: Qatar’s GDP is projected to hit 7.8 percent in 2015, the fastest rate since 2011, on gathering expansion of the non-hydrocarbon economy. The country’s economy is forecast to grow by 6.3 percent this year, down from 2013 growth rate of 6.5 percent, a report released by the Ministry of Development Planning and Statistics (MDP&S) said yesterday.
The Qatar Economic Outlook (QEO) 2014-2015 forecasts the country’s inflation rate is to be largely unchanged in 2014 at three percent, and to increase modestly in 2015 to 3.4 percent. Domestic inflationary pressures are expected to pick up over the rest of 2014 and in 2015 as domestic demand strengthens, though the moderate inflation in the first half of 2014 will restrain the year’s average, and a benign global inflation outlook will help to offset domestic sources of inflationary pressures in the near term.
The impulse to growth from hydrocarbon production in past years is receding, and growth is increasingly dependent on solid performance in other sectors. Fiscal surplus is forecast to narrow in calendar 2014 and 2015, as the government’s large investment programme gathers pace ahead of hosting the 2022 World Cup.
“The last few years have shown a robust trend of continuous growth in non-hydrocarbon sectors. Last year, for example, services and construction were the main contributors to economic growth, propelled by investments in infrastructure. And in the coming years, growth is expected to be more broadly based still”, H E Dr Saleh Mohamed
Salem Al Nabit, Minister of Development Planning and Statistics stated.
“The overall fiscal balance is on track to continue its comfortable surpluses, even if they narrow over the forecast period. This narrowing will stem from expenditure growth (capital and recurrent) as the public investment programme gathers pace, and from an expected decline in hydrocarbon revenue.”, the report noted.
The current account surplus is set to continue drifting down over the forecast period but to remain hefty as a share of GDP. The key factors are declining hydrocarbon export revenue, rising imports on stronger domestic demand, and higher foreign workers’ remittances, in line with projected expatriate population growth.
The 2013 trade surplus was sizeable at 52.1 percent of the nominal GDP, though a shade down on 2012’s outcome. The current account surplus, too, was a little lower at 30.9 percent of nominal GDP. Service imports and remittances picked up, while merchandise export growth slowed.
On the risk to the economic outlook, the report said the main risks include the possibility of weaker oil prices due to the slowdown in emerging market economies and expanding oil supply; and escalating domestic project costs that could cut into the fiscal surplus. Still, “Qatar will continue strengthening its economic management and its private sector to reinforce its positive development trajectory”, commented Dr Saleh.