Infra spend boosts Qatar's growth prospects
Report says construction sector is expected to expand by 15% in 2014
Growth outpaced expectations in Qatar during 2013, while 2014 is widely expected to see a further increase in activity fuelled by high levels of infrastructure spend and consumer demand, according to a new report by Oxford Business Group (OBG).
It said that the country's construction sector grew by 13% in Q3 and is expected to expand by 15% or more in 2014 as a result of ongoing work.
"Perhaps the most significant event of 2013 was the transition of power from Qatar’s emir, Sheikh Hamad Bin Khalifa Al Thani, to his son, Sheikh Tamim bin Hamad Al Thani, in late June.
"Sheikh Tamim is expected to follow the policy line of his father, with a focus on economic diversification, underpinned and funded by the country’s natural resources, along with maintaining strong social services," it said.
Overall GDP growth for Qatar during the second half of 2013 was 6.2%, according to the Ministry of Development Planning and Statistics, while a recent Qatar National Bank analysis forecasted that GDP is likely to rise by 6.8% in 2014.
Inflation has remained steady, but increased by 2.8% in November, on the back of higher rents and energy costs. OBG's analysts said there "could be more price pressures in the coming year and beyond" - sparked again by higher consumer spend, a rising number of expats coming to the country to work on infrastructure projects and higher costs of construction labour and materials.
"While Qatar’s preparations for football’s headline event will continue to attract headlines along with large investments in 2014 as work ramps up on stadiums and supporting facilities, far more economic activity will be taking place well away from the pitch as other infrastructure projects are rolled out," it concluded.