High oil prices and peak LNG production boosted Qatar’s real GDP by an estimated 19.9 per cent in 2011 but growth is expected to slide to 9.8 per cent in 2012, according to a Kuwaiti bank.
A freeze on further LNG projects until 2015 means Qatar’s output peaked at 77 million tonnes in 2011 and will likely remain so in 2012, slackening the high pace of growth recorded over the past few years, National Bank of Kuwait said in a study published this week.
But the report noted that Qatar, the world’s dominant LNG exporter, is also making headway in utilizing and marketing associated products including gas to liquids (GTL) and natural gas liquids (NGL) projects as well as downstream processes such as petrochemicals and fertilizers.
It said a concerted effort is also being undertaken to diversify and develop the non-oil sector as part of the Gulf country’s National Development Strategy 2011-2016 and the broader Qatar National Vision 2030.
Spearheaded by spending in excess of $125 billion over five years, around $65 bn of which will be directly funded by the government, infrastructure investment (including World Cup 2022 development spending) and manufacturing will drive non-oil sector growth alongside financial services, trade and tourism, the report added.
“Given the current dynamics of Qatari output, real GDP growth is therefore projected to accelerate by 19.9 per cent in 2011 before moderating to 9.8 per cent in 2012 as a result of the final completion of LNG expansion and associated gas projects (including GTL).”
It said growth in gas production itself is projected to slow down to about seven per cent in 2012, while oil output is forecast to remain stable over the coming two years at 0.8 million barrels per day.
The report forecast growth in the non-oil sector at around 12.1 per cent in 2011 and 12.5 per cent in 2012.
Turning to finance, NBK expected Qatar to bask again in actual fiscal surpluses of 3.7 and 1.8 per cent through 2011 and 2012 because of strong oil prices and maximum annual LNG production.
“A slowdown in hydrocarbon revenue growth coupled with increasing public sector spending - including capital expenditures and wages - will make a greater impact on the central government balance in 2012 than in previous years.
Meanwhile, strong export revenues are expected to translate into sizeable current account surpluses in both 2011 and going forward in 2012.”
The sharp expansion in Qatar
’s gas industry has catapulted its economy and turned it into one of the richest nations on earth before becoming the wealthiest in terms of GDP per capita income in 2010.
Qatar’s GDP shot up by nearly 26.8 per cent in 2007 and 25.4 per cent in 2008 before growth tumbled to only 8.7 per cent in 2009 following a sharp drop in oil prices in the wake of the 2008 global fiscal distress. But growth in 2009 is considered high compared with the rates recorded in other parts of the world, where it dipped to near zero or recorded negative growth.
Qatar launched LNG projects in early 1990s to tap the massive gas wealth of the 6,000-square-km offshore North Field, estimated at around 25 trillion cubic metres, nearly 15 per cent of the world’s total gas deposits.