Tuesday, September 22, 2020
banner
Home /  Business  /  Strong fiscal stimulus, infra spending to prop up Qatar’s economy, says report

Strong fiscal stimulus, infra spending to prop up Qatar’s economy, says report

Strong fiscal stimulus, infra spending to 
prop up Qatar’s economy, says report

Satyendra Pathak
Doha
Strong fiscal stimulus and spending on infrastructure projects will prop up economic activities in Qatar, FocusEconomics has said in its latest report.
According to FocusEconomics Consensus Forecast-Middle East & North Africa for May, Qatar’s fiscal package of roughly 13 percent of GDP should be cushioning the blow to economic activities and help spark a rebound once the pandemic subsides.
The economy likely contracted in the first quarter due to a sharp deterioration in the energy sector. Containment measures and travel restrictions battered domestic demand in the first quarter, particularly the tourism and retail sectors, while a sharp fall in hydrocarbon prices weighed heavily on merchandise exports.
The report, however, said that economic prospects for this year soured considerably as the lockdown will likely hammer the tourism and retail sectors for the majority of the year.
Moreover, depressed oil and gas prices will weigh heavily on government finances and the external sector.
While FocusEconomics panelists see contraction in GDP in 2020, they expect the country to grow 3.1 percent in 2021. The country’s economic growth will further accelerate to 3.4 percent in 2022 and almost 3.5 percent for the next two years, the report said.
The report has indicated that the GDP per capita in Qatar will also increase from $65,395 in 2020 to $79,072 in 2024.
The consumer prices year-on-year should remain relatively flat this year, due to weak economic activity.
In March, the Central Bank cut its lending rate by 100 basis points to 2.5 percent, echoing the Fed’s rate cuts.
“Our panelists see consumer prices unchanged in 2020, which is down 0.5 percentage points from last month’s forecast. In 2021, our panel sees inflation averaging 1.5 percent,” FocusEconomics said in the report.
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 and reach up to 4.58 percent by 2024.
The Qatari riyal will continue to be pegged at $3.64 in the years to come, the report said.
According to the report, 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 $54.3 billion in 2020 to $88.2 billion in 2024, the report said, merchandise imports would increase from $31.3 billion in 2020 to $37.5 billion in 2024.
FocusEconomics, a leading provider of economic analysis, has also forecast that Qatar’s trade balance would rise from $24.4 billion in 2020 to $50.6 billion in 2024.

Pages