Qatar’s QR75bn financial stimulus package is expected to provide relief to the private sector, thus supporting the macro-economy, as well as rein in demand pull inflation, according to experts.
The QR10bn fund to the Qatar Stock Exchange can help lift sentiments, which already has sent positive vibes to the market with capitalization gaining more than QR11bn, after the package was announced.
Although the pandemic would have a “moderate” impact across the region, Doha Bank group chief executive Dr R Seetharaman said “Qatar’s macro fundamentals are strong with its reserves twice the gross domestic product (GDP).”
The overall long-term supply chain of liquefied natural gas ensures recurring revenues, which would provide stability to (Qatar’s) economy, he said.
However, an analyst with a leading investment house said the economic and opportunity costs are still to be ascertained since the pandemic has not died down.
Analysts are of the view that the real effect of the downturn in businesses would start reflecting from the second quarter GDP.
The country’s banking sector has allowed deferment of loan repayment for varying periods without any penalties. In this regard, the Qatar Central Bank (QCB) will provide additional liquidity to lenders. The Qatar Development Bank has also decided on loan postponement.
Welcoming the steps taken by the government (on the financial package), Seetharaman said the “thoughtful” action would see the QCB ensure enough liquidity for the loan deferment, which will help improve the debt servicing capacity, especially of small and medium enterprises.
With many leading realty and logistics majors providing rent relief and the government offering six-month customs duty holidays on medicines and food industry, inflation in the country could be contained especially on this front, analysts said.
The Supreme Committee for Crisis Management, led by His Highness the Amir Sheikh Tamim bin Hamad al-Thani, had announced that food and medical goods will be exempt from customs duties for a period of six months, provided that it is reflected in the selling price to the consumer.
Several sectors would be exempt from electricity and water charges for six months. They include, hospitality and tourism; retail; small and medium industries; commercial complexes, in exchange for providing services and exemptions to tenants, as well as logistics areas.