Qatar  | عربي

QNB Group has published today its Qatar Economic Insight 2015. The report examines recent developments and the outlook for the Qatari economy as it continues its strong growth based on large investment spending

We forecast real GDP growth to accelerate to 7.0% in 2015, 7.5% in 2016 and 7.9% in 2017 as the government continues investing heavily in the non-hydrocarbon sector despite lower oil prices

The Barzan project is expected to drive growth in the hydrocarbon sector, which is expected to grow by 0.8% in 2015, 1.8% in 2016 and 1.9% in 2017 despite declining oil production due to maturing oil fields

The non-hydrocarbon sector is projected to continue its double-digit growth on large investments in construction, financial services and real estate

The large influx of expatriate workers driven by major investment projects will add to aggregate demand, putting moderate pressure on domestic inflation

• Counterbalancing this, foreign inflation is expected to slow in 2015-17 as international commodity prices fall on weak global demand, record food harvests and a stronger US dollar

Overall inflation is projected to slow to 2.5% in 2015 as rising rents (with a lower weight in the basket) are expected to be partly offset by lower international food prices, before accelerating to 3.2% in 2016 and 3.3% in 2017



Lower hydrocarbon revenue and rising capital spending are expected to tip the fiscal balance into deficits of 2.2% of GDP in 2015, 3.4% in 2016 and 3.7% in 2017


Hydrocarbon revenue is expected to decline with lower oil prices and crude oil production, but this will be partly offset by higher non-hydrocarbon revenue, supported by better corporate tax collection

The government is expected to increase its capital spending while stabilising current expenditure with further expenditure rationalisation.

• The government plans to change its fiscal year to a calendar year basis starting with the 2016 budget, with an interim extension of the 2014-15 budget by nine months to cover the remainder of 2015

Bank lending is expected to rise by 9.0% in 2015, 10.0% in 2016 and 11.0% in 2017 increasingly driven by project lending and the expanding population

Deposits are projected to grow steadily by 11.3% in 2015, 11.5% in 2016 and 12.5% in 2017 on strong population growth and higher non-hydrocarbon GDP

The outlook for banking is positive with low provisioning requirements and efficient cost bases will support strong bank profitability



*Other recent QNB Economic Insight reports include China, India, Indonesia, Jordan, Kingdom of Saudi Arabia, Kuwait, Oman and UAE are available on the QNB Group website. QNB Group operates in 26 countries in Asia, Europe, the Middle East and North Africa and its economic reports leverage its knowledge of these markets to provided added value for its clients and counterparties



Disclaimer and Copyright Notice: QNB Group accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Where an opinion is expressed, unless otherwise provided, it is that of the analyst or author only. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. The report is distributed on a complimentary basis. It may not be reproduced in whole or in part without permission from QNB Group.


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