Qatar’s real gross domestic product (GDP) will likely bottom out in the near term and gradually pick up 1.75 percent in 2024-2025, according to the latest statement from the International Monetary Fund (IMF). In 2023, Qatar’s real GDP growth was estimated at 1.3 percent as post-World Cup growth normalization continued.
This year, the IMF expects Qatar’s non-hydrocarbon output to grow with strong public sector investments, tourism and ongoing LNG expansion projects.
Third National Development Strategy propels growth
In January 2024, Qatar launched its Third National Development Strategy (NDS3) to accelerate its transformation journey toward Qatar National Vision 2030. This strategy seeks to empower the private sector, accelerate diversification, boost productivity and competitiveness, and strengthen climate sustainability.
In light of NDS3, Qatar’s medium-term outlook is more favorable with the IMF expecting growth to reach close to 4.5 percent. Moreover, the completion of the significant LNG production expansion as the North Field East and South projects and non-oil growth will further boost the country’s medium-term growth. Moreover, the North Field West project will increase LNG production by another 20 percent by 2030.
Besides, the IMF expects Qatar’s headline inflation to ease to 2.5 percent in 2024 and 2 percent over the medium term. In addition, the country’s external and fiscal accounts will likely remain in surpluses in the medium term if oil prices rise.
Qatar’s fiscal position
“Broad fiscal discipline has been maintained, and numerous fiscal structural reforms are underway,” added the statement. The IMF expects Qatar’s 2023 fiscal surplus to reach 5.5 percent of its GDP with the non-oil sector’s GDP growing over 2 percent. Additionally, the fund estimates a 3 percent decline in central government debt to below 40 percent of GDP in 2023. In 2024, Qatar will likely implement further spending cuts.
Read: UAE’s real GDP to grow 4 percent in 2024: IMF
Banks well-capitalized, liquid and profitable
Qatar’s banks remain well-capitalized, liquid and profitable despite non-performing loans rising to 3.8 percent in Q2 2023. In addition, liquidity coverage and net stable funding ratios remained high during Q1 2024 at 174 percent and 140 percent, respectively.
Qatar recently launched the Third Financial Sector Strategy, which aims to support financial markets, promote savings and offer greater borrowing and investment opportunities. Moreover, it aims to develop the insurance sector, foster fintech, and achieve greater financial inclusion which further bolsters its financial sector.
The IMF states that initiatives such as the Qatar National Renewable Energy Strategy, Digital Agenda 2030, and the National Planning Council and the National Statistics Center will further enhance Qatar’s transformation towards its NDS3 goals and National Vision 2023, supporting the country’s economic position and medium-term outlook.
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