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Qatar’s economy likely to grow 3.4% in 2021: Report

Qatar’s economy likely to grow 3.4% in 2021: Report

Satyendra Pathak
Doha
Qatar’s economy is expected to grow 3.4 percent in 2021as a strong fiscal stimulus package to support the non-oil private sector should cushion the downturn being witnessed due to the COVID-19 pandemic, FocusEconomics has said in its latest report.
The report noted that solid external buffers and favorable debt dynamics allow for a robust response to limit the fiscal impact of the pandemic.
The FocusEconomics Consensus Forecast-Middle East & North Africa for July report, however, said that that the country’s economy is expected to contract in 2020, which is up 0.1 percentage points from last month’s forecast, before growth of 3.4 percent in 2021.
FocusEconomics panelists see a 2.8 percent contraction in GDP in 2020, which is up 0.1 percentage points from last month’s forecast.
“The economy likely remained depressed in the second quarter, as the full effects of the lockdown and travel restrictions were felt. Since May, containment measures have been gradually eased, but international travel is expected to remain restricted until at least August 1 that does not bode well for the tourism and retail sectors,” it said.
“The lockdown will cripple the tourism sector for the most of the year, while depressed energy prices will weigh heavily on government finances and the external sector. Nevertheless, a strong fiscal stimulus package to support the non-oil private sector should cushion the downturn,” the report said.
Consumer prices fell 3.1 percent in annual terms in May, matching April’s fall, as COVID-19 dragged on.
“Consumer prices should drop on average this year due to the stark fall in domestic demand. Our panelists see consumer prices falling 0.6 percent in 2020, which is down 0.2 percentage points from last month’s forecast. In 2021, our panel sees inflation averaging 1.7 percent,” the report said.
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 4.24 percent by 2024.
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 $55 billion in 2020 to $85.8 billion in 2024, the report said, merchandise imports would increase from $28.9 billion in 2020 to $37.2 billion in 2024.
FocusEconomics, a leading provider of economic analysis, has also forecast that Qatar’s trade balance would rise from $26.2 billion in 2020 to over $48 billion in 2024.
The report has projected that Qatar’s current account balance will account for 4.1 percent of the total GDP in 2022.

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