Text size:

  • Small
  • Normal
  • Large
Qatar’s budget next year would climb 9.5 per cent to 255.8 billion Qatari riyals as capital spending rose 10.4 per cent to 85.9bn riyals. Sarah Dea / The National
Qatar’s budget next year would climb 9.5 per cent to 255.8 billion Qatari riyals as capital spending rose 10.4 per cent to 85.9bn riyals. Sarah Dea / The National

Qatar raises GDP growth and inflation outlook

Qatar on Sunday lifted its forecasts for economic growth and inflation next year, saying a decline in oil and gas output was now expected to be less than originally thought.

Qatar raised its forecast for economic growth next year and said that while prices would rise considerably as huge infrastructure-building plans gained speed, it could contain inflation.

GDP, adjusted for inflation, was forecast to expand 4.8 per centup from the 4.5 per cent that was predicted in June, the government planning authority said yesterday.

That growth rate, down from an estimated 6.3 per cent this year, would be Qatar's lowest since 2002, according to IMF data.

A period of heavy investment in the country's oil and gas resources had ended, meaning it would move closer to the growth rates of other Arabian Gulf energy exporters, the planning authority said.

But oil and gas output next year was likely to decline less than originally thought, by 0.2 per cent instead of 1.2 per cent, largely because of more crude oil production. Infrastructure building was also forecast to accelerate, taking construction sector growth to a double-digit rate, the authority said.

Qatar plans to spend tens of billions of dollars by 2020 on railways, roads, utilities and facilities to host the 2022 Fifa World Cup, but projects have started more slowly than the business community had hoped.

The authority predicted that Qatar's budget next year would climb 9.5 per cent to 255.8 billion riyals (Dh258.06bn) as capital spending rose 10.4 per cent to 85.9bn riyals.

Although Qatar is vulnerable to falling oil prices, the authority calculated the price of crude oil would have to drop less than $50 per barrel to shift its budget surplus into a deficit.

It regarded the main economic risk as geopolitical, an apparent reference to Iran's threats to close the Strait of Hormuz in the event of conflict over its disputed nuclear programme.

"Should geopolitics develop in a way that disrupts the free flow of gas and oil, the financial resources available to the state will be affected," the authority said.

While the infrastructure building scheme will keep Qatar's economy growing, residential rents will likely rise as companies and workers pour into the country.

The authority forecast consumer price inflation to increase to 3.5 per cent next year from 2 per cent this year. In June, it predicted inflation would be 2.5 per cent. The authority said officials could use a combination of regulation and action by the central bank to avert the economy overheating.

"Inflation remains mild and is unlikely to present a threat to macroeconomic stability," it said.

"The authorities will continue to deploy their regulatory powers to prevent traders imposing unjustified increases on consumer prices. The central bank has been vigilant in managing credit growth and has a full armoury of effective tools."

An earlier explosion of bank loans to the property sector led some analysts to fear a bubble, but the authority said year-on-year growth in commercial banks' credit to private construction and property firms had dropped to 8.3 per cent in October from more than 40 percent near the end of last year.

* Reuters

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National