Qatar best set to weather current economic storm
According to a report by BMI Research, Qatar is best p[laced to weather any economic storm that may be experienced during the coming months and into 2017
A report has revealed that in the coming months, Qatar, among all the Gulf countries, will be best set to manage the economic slowdown.
The report, from BMI Research, states that 2017 will bring a “notable divergence in growth” between Qatar, the UAE, and the rest of the Gulf States, with Qatar’s economy improving steadily from 3.1% GDP growth this year, through 3.6% in 2017, reaching 4.1% by 2020.
The BMI figures show, in comparison to other GCC States, Qatar is markedly ahead, with the UAE projected to reach about 2.8% growth next year and Saudi Arabia just 1%.
Gulf governments have been pressed to lower subsidies on fuel and utilities, while also taxing consumer purchasing power in the wake of lower global oil prices.
Although the price is forecast to improve from an average of $43.50/barrel this year to $54/barrel in 2017, BMI projects oil prices will remain lacklustre going forward.
With the average forecast deficit of 11% of GDP for the region, and Qatar predicting a budget deficit for the next three years, it is, nevertheless, likely to remain some way below the average for the region.
In a report in June this year, Qatar’s Ministry of Development, Planning and Statistics (MDPS) revised its predictions to estimate a deficit of 7.8% of GDP for this year, rising to 7.9% next year, an improvement from the 4.8% the ministry forecast at the end of last year.
However, by 2019, this deficit is expected to shrink to 4.2%
Comparably, Saudi Arabia is looking at a deficit of 11.2% GDP for 2016, and 6.8% in 2017 before falling to 2.4% in 2018, international credit rating agency Fitch said earlier this year.
The present environment is spurring governments to enact structural and fiscal reform, and, according to BMI, officials across the GCC will look into private investment for infrastructure projects as a means to “lessen the pain of government cuts”.
The report added: “We expect to see the public-private partnership (PPP) model gain traction in several sectors, including transport and power, after decades in which governments have had a clear preference for funding projects directly.”
The push towards PPP was first identified last year by the Emir Sheikh Tamim bin Hamad Al Thani when he said that the private sector should become more involved in the economy.
Sheikh Ahmed bin Jassim al-Thani said that PPPs would create new opportunities in various sectors, including sports, health and education, where there is a plan to build some dozen schools.
The Prime Minister said in early September that to assist private businesses in hiring the right staff, the process of getting work visas would be streamlined.
This would be part of the new five-year national development strategy (2017-2022) which will emphasise private sector development, Sheikh Abdullah bin Nasser bin Khalifa Al Thani added.