Qatar’s economic growth will accelerate over the next two years amid expectations of stable oil prices and continued strong exports, the central bank said on Thursday.
Qatar, a major gas exporter, saw its economy grow 1.4% in 2018, down from 1.6% in 2017, government data showed.
“Although real GDP growth was somewhat slower than the preceding year, the economic outlook for 2019 remains positive,” Qatar Central Bank said in its 2018 report.
“Favourable movements in global oil prices, strong exports, and improvement in fiscal balance are likely to provide overall macroeconomic stability in 2019.”
Citing data from the Planning and Statistics Authority, the central bank said the real gross domestic product was likely to grow at an average rate of 2.8% between 2018-2020.
The budget surplus will fall to 4.35 billion riyals ($1.20 billion) in 2019, from a surplus of 15.1 billion riyals in 2018, as spending on major projects will rise by 15%, the bank said.
Qatar’s economy has withstood a diplomatic and economic blockade imposed by Gulf neighbors led by Saudi Arabia and the United Arab Emirates since the middle of 2017.
The central bank said foreign capital inflows have returned and banking liquidity has improved, while its official reserves returned to pre-embargo level.
“After successfully tackling the economic blockade through liquidity support provided by the government through foreign currency deposits in 2017, there has been a withdrawal of public sector deposit as the liquidity situation turned normal,” the central bank said.
Qatar injected about $40 billion into its banking system in the months after the boycott in order to boost liquidity.