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Satyendra Pathak
Qatar’s economy is set to expand this year on stronger domestic and foreign demand, FocusEconomics has said in its latest report.
According to FocusEconomics Consensus Forecast-Middle East & North Africa for May report, investment in the energy sector and easing tensions with Gulf neighbours will also boost Qatar’s growth this year.
Qatar’s energy sector began the year on a robust footing, with oil and gas extraction growing year-on-year in January, the report said.
In March, Qatar Petroleum signed a ten-year supply deal with a Chinese firm. This came after the country inked supply deals with Bangladesh and Pakistan, amid plans to expand LNG output by over 40 percent in the next several years.
“The economy shrank 3.9 percent in annual terms in the fourth quarter of 2020 amid contractions in both the energy and non-energy sectors. Turning to this year, restrictions were tightened progressively between February and April in response to rising COVID-19 cases, with tougher capacity limits in force for many public venues, and some such as gyms and cinemas closed completely,” the report said.
This has likely weighed on the services sector, although private sector PMI readings through March suggested resilient activity nonetheless, it said.
FocusEconomics panellists see a 2.8 percent rise in GDP in 2021, which is unchanged from last month’s forecast, before the growth of 3.5 percent in 2022. Consumer prices fell 1.4 percent in annual terms in February, following January’s 1.3 percent decline.
Prices are seen rising later this year on higher food and energy costs, recovering activity and a supportive base effect, the report said adding that the possible implementation of VAT is an upside risk.
“Our panellists see consumer prices rising 1 percent in 2021, which is up 0.2 percentage points from last month’s forecast. In 2022, our panel sees inflation averaging 2.2 percent,” FocusEconomics said in the report.
The report has also indicated that the GDP per capita in Qatar will also increase from $59,772 in 2021 to $73,126 in 2025.
According to the annual data released as part of the report, the overnight lending rate in the country would continue to rise from the current level of 2.5 percent and reach up to 4.07 percent by 2025.
The Qatari riyal will continue to be pegged at $3.64 in the years to come, the report said.
The country would witness a sustained increase in both imports and exports in the coming years. While the merchandise exports from the country are expected to rise from $62.9 billion in 2021 to $82.1 billion in 2025, the report said, merchandise imports would increase from $29.3 billion in 2021 to $36.8 billion in 2025.
FocusEconomics, a leading provider of economic analysis, has also forecast that Qatar’s trade balance would rise from $33.6 billion in 2021 to $45.2 billion in 2025.
The report has projected that Qatar’s current account balance will account for 5.4 percent of the total GDP in 2021. The percentage of the current account balance would rise to 7.5 percent in 2025, the report said.
Qatar’s current account balance is expected to turn positive and reach $5.4 billion in 2021, the report said, adding that it will continue to remain in the positive territory for the next four years and reach $15.5 billion in 2025.
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