S&P: Qatar’s GDP to slow in 2023, back to growth path in 2025

Driven by hydrocarbon production increases due to the NFE project
S&P: Qatar’s GDP to slow in 2023, back to growth path in 2025

S&P Global Ratings expects Qatar’s GDP growth will slow to 2.3% in 2023 from almost 5% in 2022, which was partly supported by World Cup-related activities.

Qatar’s strong fiscal and external net asset positions will remain a core rating strength, with revenue streams additionally enhanced by the North Field Expansion (NFE) starting in 2026, according to the credit rating agency.

“We forecast growth momentum will strengthen from 2025 as capital spending remains strong and hydrocarbon production increases due to the NFE project, with liquefied natural gas (LNG) production capacity expected to increase about 60% by 2027 from current levels,” the report observed.

Read more: QatarEnergy and Sinopec unite for largest LNG expansion

According to the paper, Qatar’s current account is projected to average a surplus of around 20% of GDP over 2023-2026, supported by favorable hydrocarbon prices and increasing production.

However, the general government budget surplus is expected to moderate to approximately 5% of GDP in 2023, down from 10% in 2022 due to the expected moderation of oil prices.

While Qatar’s external liquidity position is weakened by the mainly short-term nature of domestic banks’ foreign funding, including nonresident deposits, the report predicts a steady decline in banking sector external debt over the forecast horizon.

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