Fast-paced growth of Qatar economy expected to continue this year: Societe Generale
January 21 2020 07:52 PM
The Al Janoub Stadium, one of the venues of 2022 FIFA World Cup in Qatar
The Al Janoub Stadium, one of the venues of 2022 FIFA World Cup in Qatar

Qatar’s economy is expected to grow at 2.6% in 2020, in light of the country hosting the 2022 World Cup, which should support investments and activity in the construction, tourism, and transportation sectors

Fast-paced growth of the Qatari economy is expected to continue this year with acceleration from the country’s non-hydrocarbon sector, French multinational investment bank and financial services company Societe Generale has said in its latest update.

According to Societe Generale, Qatar’s economy is expected to grow at 2.6% in 2020, in light of the country hosting the 2022 World Cup, which should support investments and activity in the construction, tourism, and transportation sectors.

Qatar is the world's leading exporter of liquefied natural gas and holds the third largest gas reserves in the world (estimated at 16% of the global total), it said.

Like other Gulf countries, Qatar has been hit by a global decline in oil prices since 2014. However, the economic results have been better than that of its neighbours, due to successful economic diversification, namely via the development of large-scale projects.

After falling to a deficit of 5.5% in 2016, Qatar’s surplus of the budget balance stood at an estimated 4.8% in 2018, backed by restrained government spending and higher energy prices (hydrocarbon exports still account for nearly 50% of the government’s total revenues). For 2019, the International Monetary Fund has forecast a surplus of 6.6%.

The country’s debt-to-GDP ratio grew in recent years, up to 53.4% in 2018, but is expected to moderate to 44.8% by 2020.

“New projects are planned in infrastructure and telecommunications, and various construction projects are in progress in preparation for the World Cup in 2022. Traditionally, companies rely on loans and treasury bonds to finance their development projects, as the country provides major support through its sovereign fund, the Qatar Investment Authority.

Qatar has opted for a proactive policy based on urban planning and development, highways and railroad networks, leisure and luxury infrastructure, etc,” Societe Generale said.

The country is also seeking to promote the development of the tertiary sector (especially tourism and financial services), and has a solid and profitable banking sector.

Qatar is overall a stable, rich country (it has the highest income per capita in the world in 2017 according to the World Bank).




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