Growth Forecasts Revised Upwards
BMI View: We have raised our economic growth forecasts for Qatar and now project average annual real GDP growth of 5.7% between 2014 and the end of the decade, from 5.1% previously. Strong population growth and progress on the government's large-scale infrastructure programme will drive both construction activity and the sustained expansion of the services sector.
The Qatari economy is set to remain a regional outperformer over the coming years, marked by strong and broad-based growth in the non-hydrocarbons sector. We have raised our economic growth forecasts for the country, and now project average annual real GDP growth of 5.7% between 2014 and the end of the decade - compared with 5.1% previously. Both construction activity and the services sector will continue to expand at a rapid clip in the run-up to the FIFA 2022 World Cup, on the back of strong population growth and progress on the government's large-scale infrastructure programme. We caution, however, that Qatar's hosting of the World Cup is coming under increasing international scrutiny, due to persistent allegations of corruption over its bid for the event. This adds a tail risk to our outlook (see below).
Preliminary data released by the Qatar Statistics Authority (QSA) shows that the Qatari economy grew by 6.5% in real terms in 2013, up from 6.1% in 2012. This came above our forecast of 5.7%, owing to significant upward data revisions for the first three quarters of the year. As we expected, the contribution of the hydrocarbons sector to overall economic growth was broadly flat, a situation we see continuing over the coming years given maturing oil fields and a plateau in gas production. By contrast, the non-hydrocarbons sector grew by a rapid 11.4% in real terms, up from 10.1% in 2012, with activity expanding most markedly across the construction, manufacturing, transportation, services and hospitality sectors.
|Remaining The GCC's Outperformer|
|Qatar - Real GDP Growth, % (left); by Sector (right)|