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Satyendra Pathak
Doha
Qatar's economy is expected to grow in the range of 2-3 percent in 2018, according to the 41st annual report released by Qatar Central Bank (QCB) recently.
Qatar's growth outlook for 2018 has improved, driven by increasingly broad-based global economic recovery, the report said.
"With higher oil prices, the positive terms-of-trade will strengthen the domestic fiscal and current account balance. On the other hand, the diversification strategy will continue to support growth in non-hydrocarbon sectors," the report said.
Hydrocarbon sector will gain momentum in line with an improvement in global crude oil prices, the report said adding that conscious policy efforts toward diversification of domestic economy will lead non-hydrocarbon sector to play a vital role in realising higher growth potential.
According to the report, economic growth outlook for Qatar turned positive for 2018 as a number of favourable developments emerged from both global and domestic economic environment.
From the global economy, net exports demand gathered momentum following an upswing in global trade and favourable financial market conditions.
Rise in global trade and pickup in global commodity prices contributed favourably to the performance of hydrocarbon sector in 2017.
In the non-hydrocarbon sector, construction, manufacturing, retail, and wholesale trade emerged as the new drivers of growth.
"Despite unjust economic blockade in June 2017, the economy maintained its momentum and registered an average growth of 1.8 percent in the second half of 2017. The economic diversification strategy, followed in the recent years, aided in dealing with dislocation of supply-chain in the post-blockade period," the report said.
In 2017, the report said, GDP at current prices increased by 9.9 percent reflecting turnaround in global crude oil prices. The production cut agreement between Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members helped in reducing demand-supply imbalances.
At constant prices, real GDP growth somewhat moderated to 1.6 percent in 2017 from 2.2 percent in the previous year.
However, compared to the other GCC countries, in an environment of oil production cut, Qatar still registered the second strongest growth performance in the region.
Further, this also highlighted the role of non-hydrocarbon sector in the overall growth dynamics.
During 2017, construction along with new drivers of growth such as wholesale & retail trade, manufacturing and agriculture sector boosted the performance of non-hydrocarbon sector. Construction sector maintained its momentum as expenditure on large infrastructure projects continued.
"The operationalisation of Hamad Port, one of the completed infrastructure projects, played an important role in facilitating foreign trade and in dealing with the unjust economic blockade," the report said.
At present, the report said, risk emanating from domestic macroeconomic environment is evenly balanced. However, risk to growth outlook emerges from the slower pace of economic recovery in the US and slight expected moderation in growth of trading partners such as Japan and China in 2018.
In this backdrop, improved fiscal and current account balance will also add stability to the domestic macroeconomic environment.
Earlier in January, the World Bank (WB) has forecast a growth of 2.6 percent in Qatar's economy over 2018.
