Qatar’s reserves are "sufficient to maintain" the currency peg to the dollar for several years, meaning that the "risk of devaluation remains negligible," a report has shown.
The country’s economic diversification projects will "sustain robust growth" until 2030, before slowing thereafter, The Economist Intelligence Unit (EIU) has said in a recent report.
“There remains potential for bursts of high growth if further gas export projects, beyond those planned for the mid-2020s are approved by the government. Diversification and the expansion of the services sector, funded by the state's hydrocarbons wealth, will also provide opportunities for growth.”
In its recent Qatar Economic Outlook, the International Monetary Fund had said Qatar’s peg to the dollar means that monetary policy will gradually tighten in tandem with the US.
Evaluating the impact on the country’s banking sector due to the blockade imposed on Qatar by a quartet of Arab countries, the EIU said, “Liquidity injections from the QIA (Qatar Investment Authority) and access to international capital markets will keep them solvent in 2018-19.”
The population will continue to increase, to 3.8mn in 2050, the EIU said. As a result, growth in real GDP per head will be much slower than headline growth.
In terms of overall business environment, Qatar’s economic reforms help to improve its scores in most components of the business environment. In particular, policy towards foreign investment, and private enterprises and competition has improved markedly in an effort to “counteract the regional effort to isolate” Qatar. The ongoing investment programme also further improves the already strong state of infrastructure in Qatar, EIU said.
The report said the large liquid reserves at the QIA (Qatar's sovereign wealth fund) are largely accessible by Qatari sovereigns, minimising the risk of an external debt default.
The IMF also said Qatar’s growth is expected to recover to 2.8% in 2018, and rise further to an average of 3% in 2019-20, as rising energy receipts help ease fiscal constraints, spending on the multi-year infrastructure upgrade ahead of the FIFA World Cup continues, and as the $10bn Barzan natural gas facility comes onstream in 2020.