Qatar's gross government debt as a percentage of GDP has been forecast to drop to 40.4% this year and 33.2% in 2026.
In its latest country report, Oxford Economics noted the gross government debt as a percentage of GDP may fall to 36.9% next year and 34.1% in 2025.
“The decrease in the ratio of government debt to GDP is a positive signal of the government's ability to manage its finances prudently. It suggests that the government is making progress in managing its budget deficit and is taking steps to reduce its debt obligations, which will lead to increased confidence in the country's financial stability and economic growth,” an analyst noted.
According to Oxford Economics the 2023 Qatar budget, based on an oil price of $65 per barrel (pb), up from $55 pb in the 2022 budget, projects a surplus of QR29bn, equivalent to 3.4% of the country’s GDP.
Oxford Economics has revised its 2023 forecast for Brent to $80 pb, down from 81.5 pb last month, but still well above the budgeted price, and LNG prices are softening.
“But with spending growth moderating, we expect a budget surplus of about 9% of GDP this year,” Oxford Economics noted.
Oxford Economics has kept its GDP growth outlook unchanged at 2.6% for this year and next, as both the energy and non-energy sectors slow down.
Commodity prices have softened amid weaker global growth but remain elevated, supporting the macroeconomic environment.
“We think GDP data for Q1, 2023 will show that growth slumped to 4.8% year-on-year from 8% in Q4, 2022. The economy grew by 4.9% last year overall, the fastest pace since 2014,” Oxford Economics said.
Non-oil activity is continuing to rise according to the PMI survey, ending Q2 strongly at 53.8 in June. Robust demand has been a key driver of the recovery in output and employment and has kept businesses optimistic, particularly in the manufacturing and services sectors.
“We expect non-oil GDP growth to soften somewhat, slowing from 3.3% this year to 3.2% in 2024,” Oxford Economics said.
The latest industrial output data show the mining sector's performance continues to improve, albeit at a slower pace of just 0.8% y-o-y in May.
The trend is consistent with Oxford Economics’ energy GDP growth outlook, which it thinks will ease to 1.3% this year, from 1.7% in 2022.
Still, the North Field gas expansion project is driving a more positive medium-term outlook for the sector, the researcher noted.