Qatar’s short-term political risk profile remains among the most stable in the region.
Qataris benefit from massive hydrocarbon wealth which is spread generously across the country’s native population and enjoy the highest per capita GDP in the world.
The performance of the Qatari economy will be more mixed than in recent years, amidst the intertwined pressures of the global energy slump and tightening domestic liquidity.
According to BMI Research, Qatar will grow 4.4% this year and 4.8% in 2017, driven mainly by strong growth in investments as preparations for the FIFA 2022 World Cup continue.
Lower hydrocarbons prices do not present a significant threat to Qatar’s fiscal sustainability.
Nevertheless, the government will seek to tighten control over public spending and rationalize Qatar’s vast pipeline of infrastructure projects – a trend that will be positive for the economy over the longer run.
Given the economy’s heavy reliance on the hydrocarbon sector, a pronounced global economic downturn – if it were to translate into a sustained drop-off in demand for oil and gas – could impact negatively BMI’s forecasts for Qatar’s external account position, budget and growth outlook. That said, BMI highlights that the country’s $256bn sovereign wealth fund – as well as its continuing ability to tap international debt markets – provides the economy with significant bulwarks against these risks.
The construction sector remains exposed to the potential for delays and cost overruns, a factor that is increasing and unlikely to improve over the medium term.
Macroeconomic Forecasts (Qatar 2014-2017)
Indicator 2014 2015e 2016f 2017f
Real GDP growth, % y-o-y 6.2 5.5 4.4 4.8
Nominal GDP, USDbn 211.7 155.4 155.7 188.3
Consumer price inflation,
% y-o-y, eop 2.7 2.7 3.0 3.0
QAR/USD, eop 3.64 3.64 3.64 3.64
Budget balance, % of GDP 16.0 3.1 -3.6 0.8
Current account balance,
% of GDP 23.5 8.8 -1.9 1.7