By Santhosh V Perumal/Business Reporter
Qatar’s economy will continue to display “solid” growth this year due to the implementation of large infrastructure projects as the fast-growing population will bolster domestic demand.
Thus, the investment outlook for companies in both hydrocarbon and non-hydrocarbon sectors has improved as they continue to see opportunities for business expansion, said the Business Optimism Index (BOI), jointly prepared by the Qatar Financial Centre Authority (QFCA) and Dun & Bradstreet.
“This latest survey demonstrates clearly that the country’s private sector is dynamic, investing in the nation’s prosperity to help realise the goals of the Qatar National Vision 2030,” Sheikh Mohamad bin Faisal bin Qassim al-Thani of Qatari Businessmen Association said.
On investment outlook for firms in Qatar, Yousef M al-Jaida, chief strategic development officer, QFCA, said manufacturing firms are planning to invest in business expansion in Q1, 2014 because of growing sales expectations in the coming months. Terming infrastructure construction as an important factor, he said manufacturing firms supplying to the construction industry anticipate higher sales due to a rise in the number of infrastructure projects being awarded.
“In addition, manufacturing exporters expect higher demand for their products from foreign markets,” he said.
More than half of the hydrocarbon companies (53%) plan to invest in business expansion in Q1, 2014 compared to 33% in the previous quarter; while 47% of the non-hydrocarbon respondents have plans to invest in business expansion in Q1, 2014 against 35% the previous quarter, the BOI said.
However, the BOI also found that transportation and storage sector firms were least optimistic on business expansion plans.
Qatar’s economic growth accelerated to 6.2% year-on-year in the third quarter from 6% in Q2 spurred by double-digit growth in trade, restaurants and hotels, construction, transport and communication, financial, real estate, and business services as well as domestic services.
The non-hydrocarbon sector grew 9.5% year-on-year (y-o-y) in Q3 2013. The transport and communication sector grew at 13.9% y-o-y, driven by post-Ramadan festivities, which boosted travel and tourism, as well as higher number of mobile subscribers, which is a key characteristic of the stronger growth in private consumption boosted by a growing population.
The finance, real estate, and business services sector grew 10.5% y-o-y, as real estate services were boosted by the growing population. The construction sector grew at 13% as Qatar’s infrastructure development programme is gathering momentum. A new wave of expatriate workers is coming into Qatar in response to higher labour demand for infrastructure projects, which will continue to drive economic growth by boosting domestic demand, services as well as investment in housing and other infrastructure.
“A growing population and rising infrastructure investment are key factors contributing to demand expansion in most key economic sectors,” Prashant Kumar, associate director, Dun and Bradstreet South Asia Middle East said.
Al-Jaida, along with others, presenting the findings of the BOI.
