The resilience and strength of Qatar’s economy has been validated once again. International Monetary Fund (IMF) has said that Qatar’s economy is likely to witness strong recovery next year.
A gradual recovery in Qatar - with real GDP growth projected at 2.7 percent in 2021- will be supported by increasing gas production and the rebound in domestic demand, it said in a statement released early this week.
IMF has praised government’s proactive response taken to tackle pandemic. The swift response in implementing containment measures helped limit the health impact of the COVID-19 pandemic. The authorities’ swift response - with strict prevention and containment measures and one of the highest per-capita testing rates in the world - allowed the country to resume all economic activities since September. The policy response was centered around a QR75bn package to support the economy.
A key part of the package, the Qatar Central Bank’s (QCB) zero-percent repo facility (QR50bn) facilitated ample liquidity in the banking system which, together with QCB’s lowering of its policy rates, has supported credit to the private sector.
A credit guarantee scheme - totaling QR5bn and administered by the Qatar Development Bank- provided direct support to small and medium enterprises (SMEs) and protected jobs. Households and businesses were allowed to defer loan repayments until the end of the year and benefited from a waiver of rental and utility fees. These measures, along with others to ensure salary payments and basic allowances to workers and to reduce custom tariffs on critical supplies (all totaling QR2.1bn), helped sustain economic confidence, dampen the impact of the shocks on businesses and households, and sustain the healthcare response.
Next year’s budget and fund allocation to various sectors will ensure that economic recovery continues unabated. The 2021 budget projects a deficit of around 6 percent of GDP, maintaining support to the economy.
In 2021 Budget, QR72.1bn have allocated to spending on major projects. These included new projects, as well as continuing work on developmental projects in different sectors and those related to hosting the World Cup 2022.
The total allocations for the Health Sector in the 2021 Public Budget are QR16.5bn and among the most important projects in health sector are expansion of Hamad Medical Corporation facilities and establishment of new Primary Care Centers.
Similarly, QR25.4bn is allocated to develop major infrastructure projects, provide water and electricity networks, in addition to continuing the work of maintenance, development and expansion of roads. In education sector, QR17.4bn has been allocated and major projects in the sector include expansion and development of existing schools and educational institutions.
