São Paulo – The International Monetary Fund (IMF) said on Tuesday (31) that Qatar has been facing the international economic crisis with significant growth of Gross Domestic Product (GDP) and fiscal and external current account surpluses. Furthermore, the government intervention in the banking system guaranteed financial stability and fiscal space for the country to maintain a great investment program in sectors of the economy that are not related to production of oil and gas. Diversification of funds is one of the main challenges for Qatar in coming years, according to the IMF.
Estimates by the Fund show that the GDP of Qatar grew 18.8% in 2011, as against 16.6% in 2010 and 12% in 2009, to reach US$ 173 billion. The hydrocarbon sector, which includes oil, natural gas, propane, butane and their products, grew 31.1% in 2011 and the non-oil sector grew 9% in the same period. The development of areas not connected to oil was boosted by industry, financial services, trade and tourism.
The IMF forecasts that in 2012 the GDP of Qatar should slow down and grow 6%. The hydrocarbon sector should grow 2.9% and the others should repeat the average growth of 9%. “The economic outlook for 2012 and beyond looks favourable, despite increased external risks. The main downside risks are lower hydrocarbon prices and potential disruption in transportation of liquefied natural gas (LNG) due to increased geopolitical tensions,” says the IMF report.
The study recognises that Qatar is making an effort to reduce its dependence on the production of oil and also praises the country’s intervention in the banking system in 2011. It adds, however, that Qatar has a daring growth policy and forecasts that the good moment for the country’s economy may result in higher inflation, from 2% last year, according to estimates, to 4% in 2012.
“Fiscal policy must continue to maintain a careful balance between spending on infrastructure to sustain non-inflationary growth, and saving and investing hydrocarbon surpluses abroad to generate sufficient income to finance future budgets,” points out the study.
The IMF concludes that dependence on oil product price fluctuations requires not only good administration of resources but also diversification of other sectors of the economy and greater competitiveness. It also suggests that it would be “opportune” to consider “deeper pension reforms”.
*Translated by Mark Ament
