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Satyendra Pathak
Qatar’s GDP growth should speed up this year due to improved private consumption, ongoing gas sector investment, warming relations with Gulf neighbours and the boost to tourism coming from the FIFA World Cup scheduled for late 2022, FocusEconomics has said in a recent report.
FocusEconomics panellists see a 4.3 percent rise in GDP in 2022, which is unchanged from last month’s forecast, and 2.7 percent growth in 2023.
After mild overall GDP growth in the fourth quarter of 2021 driven by the non-energy sector, the report said, available indicators in Qatar suggest a further solid non-energy performance in the first quarter of 2022.
The report said, “The private-sector PMI averaged well in expansionary territory in the quarter. March’s reading was strong in particular, driven by accelerated expansions in output and new orders. Moreover, visitor arrivals soared in annual terms in January–February thanks to milder COVID-19 restrictions.”
The report, however, said that the energy sector seemed to perform less well as February saw a double-digit decline in oil and gas extraction output.
“In geopolitics, the Ukraine war has boosted Qatar’s position in global gas markets at the expense of Russia, boding well for the energy sector in the longer term. Moreover, in April, Qatar and Saudi Arabia formed a joint business council, with a view to boosting trade ties which were severely weakened by the Saudi-led embargo,” it said.
“Inflation rose to 4.4 percent in March from 4 percent in February. Price pressures are expected to be notably higher this year compared to last, on elevated global commodity prices and stronger domestic consumption. The possible implementation of a VAT is an upside risk, although the tax is increasingly likely to be delayed amid already-elevated inflation and booming oil revenues,” the report said.
A reinstatement of restrictions due to new COVID-19 variants remains a key risk, as are higher consumer prices stemming from the war in Ukraine.
FocusEconomics panellists see inflation averaging 4 percent in 2022, which is up 0.3 percentage points from last month’s forecast, and 2.5 percent in 2023.
According to the annual data released as part of the report, the Qatari riyal will continue to be pegged at $3.64 in the years to come.
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 $111.9 billion in 2022 to $125.1 billion in 2026, the report said, merchandise imports would increase from $30.3 billion in 2022 to $41.4 billion in 2026.
FocusEconomics, a leading provider of economic analysis, has also forecast that Qatar’s trade balance would rise from $81.2 billion in 2022 to $83.7 billion in 2026.
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, which turned positive in 2021, is expected to reach $20 billion in 2022, the report said, adding that it will continue to remain in the positive territory for the next four years and reach $12 billion in 2026.
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