Qatar’s economy is doing fine despite the unprecedented drop in oil prices in recent months. This is illustrated via steady growth rates and a notable performance on key international rankings.
On growth, the International Monetary Fund believes that the country’s GDP grew by 6.5 per cent in 2013, the highest within the Gulf Cooperation Council (GCC) bloc. It would then be unfair to assume that the economy would be affected adversely next year by the plunge in oil prices.
Sure, the energy sector, represented by both oil and gas, is vital for well-being with regard to revenue generation and by extension on public spending, exports and its impress on other components of GDP.
Undoubtedly, Qatari authorities made the right move by assuming a conservative oil price while preparing the budget. The 2014-15 one was prepared using an average oil price of $65 per barrel for the fiscal year ending in March. The authorities assumed this level even at a time of firm oil prices.
It is reasonable to make references to per capita income for any insight into the Qatari economy. The per capita income, at $146,000 per annum on purchasing power parity basis, says a great deal about the level of affluence in the GCC state. Other studies record a smaller amount though all have one thing in common — the per capita income of Qatar is one of the highest in the world.
The economy is reportedly not suffering from high unemployment among its citizens, unlike the challenge it creates in some of the GCC states. According to a report by the World Economic Forum on unemployment in Arab countries, the overall jobless rate in Qatar stands at 0.6 per cent, rising to 1.7 per cent among young people.
Unemployment among young people is a serious phenomenon, as it denies them the opportunity to make full use of their capabilities and educational skills.
The remarkable performance of the Qatari economy is occurring amid an absence of inflationary threats, in turn projected between 3-4 per cent in 2014 and 2015. Falling oil prices should further curtail inflationary threats, as petroleum-import nations like China and India find reasons to lower rather than increase values of their exports.
The Qatari economy suffered from double-digit inflation in 2007 and 2008 at the height of import-driven inflationary spike.
Qatar is among the best regional performers in international surveys. The country is ranked No 26 worldwide in the 2014 Corruption Perception Index (CPI), the second best ranking within the Middle East and North African region after the UAE, which was ranked 25th.
The two countries are ranked ahead of several EU countries like Cyprus, Portugal, Spain and Poland, to name a few. The CPI provides assessments into matters like bribery of public officials, kickbacks in public procurement and embezzlement of public funds.
Looking ahead, Qatar may not have the choice of adapting public spending to changes within the oil sector. The country must maintain steady public spending while preparing the country for hosting the football World Cup 2022.
As it marks the National Day, Qatar has reasons enough to celebrate on the back of an exceptional performance of its economy.