DOHA: QNB Group expects Qatar’s real GDP growth to accelerate to 6.8 percent in 2014 as the implementation of large infrastructure projects and higher population continue to drive double-digit growth in the non-hydrocarbon sector.
Quoting figures released by the Ministry of Development Planning and Statistics (MDPS), QNB analysts noted Qatar’s economy continued to maintain its strong growth momentum in the fourth quarter of 2013.
The growth figures for the fourth quarter of 2013 confirm the continued process of economic diversification of Qatar’s economy away from its traditional role as a hydrocarbon exporter toward a manufacturing and services hub. The oil and gas sector contracted by 1.1 percent year-on- year in Q4 2013, reflecting a fall in oil production, the temporary halt of a number of LNG trains for maintenance, as well as the moratorium on further exploration of the North Field.
At the same time, wholesale trade, hotels and restaurants was the fastest growing sector (19.3 percent year-on-year), predominantly on the back of the double-digit increase in population.
Financial, real estate, and business services was the second fastest growing sector (18.1 percent year-on-year) as banking intermediation accelerated and real estate services were boosted by the growing population. Construction activity expanded by 15 percent year-on-year as Qatar’s infrastructure investment programme is gathering momentum. Furthermore, transportation and communication increased by 8.4 percent year-on-year primarily owing to increased passenger flows through Doha international airport.
Looking forward, the acceleration in economic activity in the near-term is expected to be primarily driven by the implementation of additional large infrastructure projects in the non-hydrocarbon sector. The largest projects are mainly in the transport and real estate sectors.
Qatar Rail is constructing the Doha metro network. The public works authority is modernising a network of expressways (30 major projects), local roads and upgrading existing roads. Work is also being finalised on the new Hamad International Airport due to open later this year. At the same time, a number of large private-sector real estate projects are under construction.
A new wave of expatriate workers is coming into Qatar to respond to higher labour demand from infrastructure spending. This increased level of job growth should boost aggregate domestic consumption, which will be a key driving force of non-hydrocarbon GDP growth over the medium term. The Peninsula
