Qatar's economy is performing strongly and has shown resilience despite slowdown in global economy. This was evident when the S&P Global Ratings, earlier this month, affirmed its ‘AA-/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on Qatar. The outlook is stable, it said. Despite the sharp decline in economic activity associated with the COVID-19 pandemic and low hydrocarbon prices, income levels in Qatar remain among the highest of rated sovereigns, supporting its strong credit profile. High GDP per capita, rebounding to an average of $66,500 in 2021-2023 from a low of $55,700 in 2020, will mitigate the effect of weak trend growth expected throughout the forecast horizon.
S&P expects the rebound to be linked with an increase in hydrocarbon prices. It projects Qatar will continue to generate surpluses in its budgetary accounts on the general government level from 2021. The rating agency noted that Qatar’s external balance sheet remains strong, with liquid external assets continuing to offset the country’s stock of external debt by a sizable margin. S&P does not expect the ongoing blockade by some of the neighbouring countries to significantly affect the Qatari economy, given its very strong gas exports largely to markets outside the region.
Qatar Chamber’s monthly economic newsletter for May 2020 revealed that the exports of the private sector in Qatar reached QR1.94bn in March 2020, achieving stability compared to the previous month of February, when it was QR1.954bn. The report dealt with the development of the role of the private sector in managing economic activity, in sustainable development, the responsibility of the private sector towards society, and its willingness to implement the country’s strategies and plans for economic development.
Qatar’s economy is showing signs of being able to withstand the pandemic positively. This is partly due to limited presence of external investors and a QR10bn government backstop for the stock market. The government also offered a stimulus package of QR75bn to assist small business and hard-hit sectors. The recent upgrade by Moody’s of Qatar’s rating to ‘Aa3’ with a ‘stable’ outlook is also a sign of resilient economy.
KPMG in Qatar believes the major beneficiaries of Qatar’s stimulus package will be the SMEs. “The most vulnerable are the SMEs as they will be the fastest to run out of cash in the current environment. Stimulus package should have a major impact on them. Retail, auto, services, hospitality, and entertainment sectors are the most affected and hence should be significant beneficiaries”, Ahmed Abu-Sharkh, Country Senior Partner, KPMG in Qatar said.
