2.04 AM Friday, 29 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:56 06:10 12:26 15:53 18:37 19:52
29 March 2024

Qatari economy to soar 18%

Published
By Staff

Qatar’s economy galloped by 18.5 per cent in 2010 and growth is expected to remain as high as 18 per cent this year before plunging to a single-digit rate in the following two years, according to a western report.

The surge in oil prices and the Gulf country’s gas exports will also allow it to record surpluses in its fiscal and current account balance this year despite a sharp rise in public spending, said the “Arab world” report by the Washington-based Institute for International Finance (IIF).
IIF, grouping scores of major western banks, said Qatar has been buffered from the adverse impacts of the turmoil in the Arab world.

The country’s small native population of about 300,000 out of a total of 1.8 million people ( more than 90 per cent of the labor force are expatriates) has benefited from the country’s prosperity, the report said.

“The IIF estimates real GDP growth in 2010 to have been 18.5 per cent, with real hydrocarbon GDP growth of 27.9 per cent and real non-hydrocarbon growth of 9.2 per cent,” said the report, sent to Emirates 24|7.

“Growth is expected at around 18 per cent in 2011, driven by further expansion in natural gas production. Beyond 2011, growth is projected to decelerate to about six per cent in 2012 and to nearly four per cent in 2013 and onwards, with growth tapering off in the hydrocarbon sector.”
The report expected the country’s fiscal and external current account balances to remain in surplus in 2011, at 10.6 per cent and 26.per cent of GDP, respectively.

The sharp increase in government revenue from hydrocarbons, due to higher oil prices and an expected 30 per cent increase in exports of LNG, will more than offset the substantial increase in government spending, it said.

It estimated that Qatar’s external debt more than doubled in the past three years to around $104 billion at end-2010, equivalent to 81 per cent of GDP. It is projected to fall to 60 per cent by the end of 2012.

“A large portion of public enterprises’ external debt reflects hydrocarbon investment requirements.….given the projected large twin surpluses, Qatar’s total foreign assets are expected to rise from about $133 billion in 2010 to nearly $186 billion by the end of 2012,” IIF said.

“The main downside risks to the outlook remain low but their impact could be considerable, as Qatar’s prosperity depends critically on gas and oil production for export…..a sudden collapse, especially a drop by more than half, in LNG prices due to technological or other reasons (an unlikely scenario), would sharply lower hydrocarbon revenues and shift the external current account and fiscal balances to large deficits, depending on the government expenditure profile.”

Qatar, a small OPEC member, controls the world’s third largest gas deposits after Russia and Iran, with its proven reserves estimated at over 25 trillion cubic metres. Most of them are concentrated in the gigantic offshore North Field, which straddled nearly 6,500 square km across the Qatari and Iran water.

Qatar has pumped more than $100 billion to tap the field’s reserves in LNG industry and become the top global LNG exporter by overtaking Indonesia. By the end of 2010, Qatar’s LNG output capacity peaked at 77million tonnes a year.

The surge in LNG exports allowed Qatar to record one of the highest GDP growth rates in the world and catapulted it into the league of richest nations.