Qatar’s economic diversification aided by hydrocarbon revenue will help increase its share of global GDP at market exchange rates to 0.4% in 2030, almost double the 2010 level, the Economist Intelligence Unit said in a country report.
The report added that the country’s population will hit around 4.3m in 2030, largely through immigration. The country’s population stood at 1.71mn in July, Statistics Authority data show.
Government expenditure will continue to rise, the report said with projects related to the 2022 football World Cup beginning during the forecast period (2012-16). However, increased hydrocarbons production will ensure that the fiscal account remains in surplus.
According to preliminary estimates from the Qatar Statistics Authority, a sharp increase in liquefied natural gas (LNG) exports, as well as continued strong domestic demand, led to a 14.1% expansion in real GDP in 2011.
Growth will slow to an average of 6.3% in 2012-16, as no new major energy projects are planned over the period. Inflation will average 3.8% between 2012 and 2016, EIU said.
Preliminary estimates put the official budget surplus for fiscal year 2011/12 (April-March) at QR44.5bn ($12.22bn), or 6.9% of GDP.
The Economist Intelligence United report forecasted that the budget surplus will narrow in 2012/13, as revenue growth slows in line with lower average oil prices. The surplus will nevertheless be healthy, at 5.7% of GDP, it added.
“Real economic growth is unlikely to come near to the rapid rates generated by the huge gas industrialisation programme in recent years.
“However, it will remain high, averaging 5.7% in the 2012-30 period, with potential bursts of high growth if further gas export projects are approved by the government after its moratorium on new deals expires.
“Diversification and the expansion of the services sector, funded by the state’s hydrocarbons wealth, will provide opportunities for growth,” the report said.
Qatar’s overall score in the business environment rankings increases in the forecast period. Eight of the 12 business environment categories register improvements, as Qatar’s economy maintains its hydrocarbons-led growth and the domestic political environment remains stable, despite upheavals in other parts of the region.
Doha’s lowest score remains in policy towards private enterprise and competition because of entrenched local business interests in some sectors.
Qatar’s overall score benefits from the steady expansion of the country’s infrastructure, underpinned by ease of access to external financing — reflecting, in turn, the country’s high credit rating.
“Qatar’s political stability, political effectiveness and policy towards foreign investment are among the best in the region, and the country’s corporate tax rate is one of the lowest in the world,” EIU said.