Sustained investment in LNG production since the past 20 years will help Qatar continue a growth of 8.5 per cent in 2009 as it tackles an "entrenched" inflation and continues to witness a net rise in the number of immigrants, a new study said.
London-based Standard Chartered bank, in its country briefing, said Qatar will continue to diversify its economy. "We expect Qatar to continue investing in its economy despite the current slump in commodity prices. Qatar is now reaping the rewards of its continued investment in major liquid natural gas developments throughout the 1990s despite depressed oil prices," the report highlighted.
Qatar, which is currently producing 30 million tonnes per annum of LNG, plans to increase it to 77 million tonnes per annum in 2010.
Its LNG production capacity is much ahead of other gas majors Russia and Iran. It recently edged past competitors like Indonesia, Australia and Malaysia.
Standard Chartered termed Qatar as the top performer in the region in 2009.
The bank said Qatar will continue to diversify its economy this year. And this is perhaps the only country in the world that will witness a surge in construction activity this year. "Economic diversification is still a major theme for Qatar. The dependence of GDP on hydrocarbon has declined in recent years, from over 60 per cent in 2003 to around 56 per cent in 2007, despite higher hydrocarbon prices," the bank said.
"The construction sector is part of this diversification trend. While it still accounts for only six per cent of GDP, it should grow thanks to mega-projects such as the continuing development of the Qatar Financial Centre, Qatar Science and Technology Park, Education City, and Energy City, as well as the new Doha International Airport. The recently announced Qatar-Bahrain causeway, another major infrastructure project, will be the longest bridge in the world," the report added.
Surprisingly, the supply-demand fundamentals in the real estate sector in the tiny GCC state is still tight on the supply side. "A real estate price correction is taking place, but fundamental growth drivers suggest the medium-term dynamics are positive.
"The supply-demand equilibrium is still tight on the supply side, with demand not expected to be met before 2012," the bank said.
A sound fiscal policy, even though it has failed to contain inflation, has made the country's economic position stronger, the bank said.
"Qatar's fiscal position is typically much stronger than forecast due to very conservative oil price forecasts and the exclusion from government assumptions of returns on the substantial foreign assets (roughly estimated at $100bn) from which it derives earnings."
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