NEWS: Update on Qatar’s economic outlook for 2013 shows strong growth

Doha, 23 December: The General Secretariat for Development Planning (GSDP) released today the Qatar Economic Outlook (QEO) 2012–2013 update. This first QEO update sees strong growth of real gross domestic product (GDP) of 6.3 percent in 2012, a marginal upward revision on GSDP’s estimate made in June 2012’s main QEO. GSDP now pegs nominal GDP growth at 14.7 percent in 2012, with elevated oil prices lifting the estimate by over 3 percentage points from the June forecast. The outlook for 2013, too, remains bright and GSDP has revised up its forecast for GDP growth to 4.8 percent, anticipating robust growth in the non-oil and gas sector.

HE Dr. Saleh Al Nabit, Secretary General of GSDP, in commenting on the update observed that “2012 has marked a watershed in the economic development of Qatar, with the drivers of growth in the economy now firmly located in the non-oil and gas economy. Within that economy, it is pleasing to see that growth has been broad based, with strong expansion across a range of economic activities, including finance, communications and construction.” The update estimates that growth in the non-oil and gas economy will be 9.3 percent in 2012 and 9.6 percent in 2013. Dr Saleh also noted “In the years ahead we will continue to see the share of the non-oil and gas economy in total output steadily rise and with this shift there will also be less fiscal dependence on oil and gas revenues.”

The update shows that inflationary pressure remained mild in 2012 but cautions that, with a rising population and demand, residential rents are now rising and could push inflation up in 2013. Consumer price inflation in 2013 is tipped to be about 3.5 percent.

Updated forecasts of fiscal and current account surpluses are set out in the update. Both are expected to remain robust, with the fiscal surplus for 2013 revised up to 5.4 percent of GDP from June’s estimate of 4.8 percent. Upward revisions to estimated prices for gas, stimulated by Japanese demand, underlie the brighter fiscal outlook.

The update reaffirms that the risks faced by Qatar’s economy are still mainly external. Problems in the eurozone continue to pose a wider threat, and if geopolitical developments interfered with Qatar’s ability to freely ship its oil and gas cargos, this would be economically harmful. At home, there are challenges in ensuring delivery of Qatar’s infrastructure program, although Dr. Saleh noted that “good steps are now being taken to ensure that large projects are well coordinated and that the risks of cost overruns and late delivery are reduced.”

You can read the entire report here.