Author

The decline in Qatari banking system’s external debt is expected to continue in the next 12-24 months, S&P Global has said in a report.GCC countries are back to pre-pandemic levels, S&P said and noted the region’s banks’ margins, cost to income, and cost of risk are all improving.“We expect cost of risk to stay at normalised levels of about 1% and margins to continue improving although at a slower pace than in 2022,” S&P noted.GCC banks’ efficiency continues to support profitability, but inflation will increase operating costs. Low cost of labour and limited taxation help, it said.S&P expects GCC banks’ asset quality indicators to deteriorate only slightly because of slowing growth and higher interest rates. Although banks have absorbed the impact of the pandemic, they also continued to build provisions and write off nonperforming loans (NPLs) to make space for new ones.Profitability has recovered to pre-pandemic levels in most GCC countries thanks to higher interest rates and stable cost of risk. Although banking sector efficiency remains strong, inflation will increase operating costs.Lower global liquidity is likely to have a limited impact on GCC banks because of their strong net external asset positions or limited net external debt positions.Strong capitalisation and potential extraordinary government support, in case of need, continue to support banks’ creditworthiness.Rating bias remains positive, driven by sovereign and idiosyncratic factors. The Russia-Ukraine conflict has more limited implications for the region and its banks than other Middle Eastern or North African countries, S&P said.On non-performing loans of GCC banks, S&P said the NPL ratio dropped slightly, thanks to the stronger economic environment, reaching 3.3% of total loans on average for its sample of banks on September 30, 2022, compared with 3.5% at year-end 2021.“We expect a small deterioration of asset quality indicators because of the expected slowdown of the GCC economies and higher interest rates. In our view, banks have already absorbed the impact of the pandemic and continue to build provisions for difficult times. Overall, we expect the NPL ratio to remain below 5% in the next 12-24 months,” S&P said.GCC banks' capitalisation levels will continue to support their creditworthiness in 2023 and 2024, it said.GCC banks stepped up their additional Tier 1 (AT1) issuances (both conventional and Islamic) in the past few years to benefit from supportive market conditions. As interest rates increase, S&P sees lower issuance and potential decisions to not call hybrids approaching their first optional call date.GCC banks are mainly funded by domestic deposits, which have proved stable through different cycles. Deposit growth was insufficient to finance lending growth in some countries, particularly in Saudi Arabia, where the central bank intervened to alleviate the pressure.

Hamad International Airport (HIA) witnessed a significant increase in passenger traffic in 2022, with a 101.9% year-on-year surge, making this a “milestone” year as the airport welcomed 35,734,243 passengers.The airport also saw an increase in overall aircraft movements of 217,875, a 28.2% growth compared to 2021, and concluded 2022 with 44 airline partners operating to and from Hamad International Airport. The airport currently serves over 170 destinations around the world.In 2022, Hamad International Airport retained its title as the “Best Airport in the World” for the second consecutive year and launched phase A of its expansion project. As part of the MATAR, the Qatar Company for Airports Operation and Management - Airport Operations Plan, Hamad International Airport and Doha International Airport (DIA) further enhanced its airport operations during the FIFA World Cup Qatar 2022 and introduced customer-centric activities and operations in order to deliver a safe, seamless and memorable experience.Reflecting on 2022, Hamad International Airport chief operating officer Badr Mohammed al-Meer said: “The year 2022 will remain a significant and memorable year as Hamad International Airport maintained operational excellence as our passenger and aircraft movements increased. This is attributed to our forward-thinking and preparedness for the expected increase in passenger numbers, investing in our people to deliver the best customer experience to our passengers”.“For the year 2023, phase B of our expansion plan started in January, as a part of our strategy to further increase our airline and commercial partners and introduce bespoke retail and F&B offering for passengers”, he added.During the FIFA World Cup Qatar 2022, both airports implemented a robust airport operations plan, which proved its effectiveness throughout the tournament. The plan included a dedicated Event Management Centre operated 24x7 by experienced staff on-ground, coordination with all stakeholders to ensure smooth connectivity from and to the airport, the city and the stadiums and training and development.Doha International Airport (DIA), played an instrumental part in MATAR’s airport operations plan, welcoming some 13 scheduled airline operators to its premises, to help ease air traffic during the FIFA World Cup Qatar 2022. Both airports also welcomed six new strategic airline partners attributed to the FIFA World Cup Qatar 2022.As part of its operational preparations to welcome millions of visitors, MATAR also introduced a Passenger Overflow Area at both Hamad International Airport (DOH) and Doha International Airport (DIA), offering fans an extended memorable experience and seamless connectivity throughout both airports.Passengers arriving and departing from Hamad International Airport got to experience FIFA-themed events comprised of match day performances which included over 30 parades. The airport also introduced a mosaic photo wall, several fan zones and viewing zones as well as dedicated kids’ zones, in addition activities like augmented reality virtual football with interactive La’eeb Mascot, a dedicated “try your teams’ jersey” booth for football fans to take photos with their favourite team jersey and more.In 2022, Hamad International Airport was recognised as the “Best Airport in the World 2022” for the second year in a row by the prestigious Skytrax Airport Awards. The airport’s excellent service and commitment to ensuring a memorable experience also helped receive the “Best Airport in the Middle East” for a sixth time in a row.The airport was also awarded the International Standards Organisation ISO 14001 Environmental Management certification from international standards body British Standards Institution (BSI) Group and four projects from phase A of its expansion plan achieved a 4-star rating under the Global Sustainability Assessment System (GSAS) from Gulf Organization for Research & Development (GORD).In November 2022, Hamad International Airport officially unveiled phase A of its impressive airport expansion plan, which included nine projects to the world, enriching passengers’ experiences and transforming the airport into an extraordinary memorable destination. The expansion increases the capacity of the airport to over 58mn passengers per year and offers visitors an abundance of world-class services, a second airport hotel, multiple lounges and a futuristic, modern indoor tropical garden – the ‘Orchard’.Consisting of one expansive terminal, the two-time world’s best airport enables travellers to seamlessly transfer from one area to another, exploring the wonders that the premises has to offer with instilled relaxation and hospitality.Previously located at an area of 600,000 square meters, the expansion has increased the facility to 725,000 square meters – an increase of 125,000 square meters of ultimate tranquillity and profound culture.Hamad International Airport continues to grow and connect global travellers through its world-class premises – offering exquisite options for passengers and businesses alike. In 2023, the airport headed into phase B of its growth plan, with the plans of increasing its capacity to over 70mn passengers and constructing two new concourses within the existing terminal.As part of the Qatar National Vision 2030, Hamad International Airport also plans to enhance its sustainability efforts, by investing in new technologies and introducing industry firsts as it looks to sustain its dominance in the aviation industry.

Saudi carrier 'flynas', a leading low-cost airline in the Middle East, sees tremendous potential to scale up operations between Qatar and Saudi Arabia, its vice-president (International Sales) Abdulilah Suliman Aleadi said Monday.Currently, flynas operates daily to Riyadh and Jeddah with the state-of-the-art Airbus A320neo, Aleadi told Gulf Times.flynas is the only budget airline, which operates daily flights from Doha to Jeddah and Riyadh.He said flynas looks to serve many more Qataris and expatriates living in the country as Saudi Arabia offers many attractive touristic destinations in the Kingdom.Expatriates, he said, can make use of kingdom’s new ‘Stopover visa’ facility, which is offered free of charge, under which all passengers travelling either on Saudia or flynas through any airport in Saudi Arabia to their final destination are eligible.A passenger can apply for the ‘Stopover visa’ at the time of booking his / her flight through flynas.flynas passengers can apply electronically for the ‘Stopover visa’ through its website. The stopover visa application will be passed automatically to the unified national visa platform at Saudi Arabia’s Ministry of Foreign Affairs to process and issue the electronic visa immediately within four hours as maximum and send it to the beneficiary via e-mail, the airline said on its website.Aleadi said flynas now operates 1500 weekly flights to more than 70 domestic and international destinations including those across the GCC, India, Egypt, Turkey, Georgia, Azerbaijan and CIS.A recent flynas press release said the airline doubled annual growth in operation and performance during 2022, by recording 91% growth in passenger numbers to 8.7mn; flights by 45% to 66,000 and seat capacity by 46%.Additionally, flynas launched some 16 new destinations and 30 new routes as its fleet upscaled to 43 aircraft.Moreover, the company's board of directors approved raising the booking orders of 250 aircraft, in line with the goals of the Saudi Vision 2030, and the civil aviation strategy to reach 330mn passengers, 250 international destinations and 100mn tourists annually.Meanwhile, flynas opened its office in Doha in Fereej Abdul Aziz on B-Ring Road, adjacent to Avens Travel and Tours.Abdulilah Sulaiman Aleadi, Abdulla M al-Mousa, senior manager (planning and bilateral relations) and Ahmed al-Rayes, chairman of Al Rayes Group, jointly opened the office in the presence of Mousa al-Bahri, flynas corporate communications manager, Fahad al-Qahtani, senior manager (Ground operations), and Syed Mazharudheen, regional manager (Gulf and Middle East).Naser Karukappadath , managing director of Avens Travel and Tours, the GSA of flynas in Qatar, along with Ali Anakkayan, flynas Doha manager, welcomed the dignitaries.

Qatar will record the fastest annual growth in gas production in the Middle East until 2050, delivering 2.6% annual growth, the Gas Exporting Countries Forum (GECF) said in a report.Qatar and Iran and Saudi Arabia, will remain “production hotspots” through 2050 and supply slightly less than 78% of the total output in the region, Doha-headquartered GECF said in its ‘Annual Global Gas Outlook 2050’ released on Sunday.Gas production in Iran and Saudi Arabia will grow by 2.1% and 1.5%, respectively, on an annual basis over the long term. Their share of regional production will reach almost 82%, while accounting for 18% of the world’s gas output.The GECF outlook expects regional production to grow by 140 bcm by 2030. This, it said, will represent around 24% of global growth, driven by Qatar’s North Field expansion projects, along with Iran, UAE and Saudi Arabia increases as well.But longer-term growth will be even more substantial. Output will jump by 520 bcm to 1,190 bcm by 2050.The share of global output will reach 22%, while the region will account for more than 33% of global growth.The Middle East is the world’s third-largest gas-producing region, accounting for almost 17% of global output.Annual production has been growing at a rapid 6% umping from 190 bcm in 2000 to 670 bcm in 2021. By comparison, Asia Pacific and African production grew by only 4.1% and 3.7%, respectively over that period.Meanwhile, upstream investment worth $9.7tn is required in the gas sector up to 2050, GECF said.By 2050, energy demand is expected to rise by 22% while the share of natural gas in the energy mix will go up to 26%.During the review period, natural gas supply will increase by 36% while natural gas trade will expand by more than a third, led by LNG, which will overtake pipeline trade by 2026.Global GDP will more than double, from $95tn today to $210tn in real terms by 2050. Population growth will see 1.8bn additional people in 2050 with most of this rise taking place in Africa and the Asia Pacific.GECF secretary general Mohamed Hamel emphasised that all energy sources and technologies will be required to satisfy the world’s growing energy needs, while improving air quality and reducing greenhouse gas emissions.Hamel said, “The uncertainties have never been so large, and the challenges so profound. What is nevertheless clearer, and more crucial, is the energy trilemma: how to ensure a secure, affordable, and sustainable energy system over the short- to long-term? What steps should be taken to ensure that energy is available for socio-economic development, while concurrently protecting the environment?”The outlook, he said, seeks to answer these pressing questions by examining the global and regional economic growth prospects, demand and supply of energy, natural gas trade and investment, the effects of policies, technological developments, and various other drivers.

Qatar's budget balance (as a percentage of GDP) has been forecast at 15.4 this year and 10.6 in 2024, while country’s nominal GDP may scale up to $227.3bn this year and $228.8bn in 2024, an analysis has shown.The country’s real GDP growth, Emirates NBD said, may be 2.7% this year and 3% in 2024. Current account (as a percentage of GDP) is expected to be 32.6% this year and 28.4% in 2024.Consumer price inflation in Qatar has been forecast at 3% this year and 2.5% in 2024.While oil and gas output growth is expected to slow this year, continued investment to boost production capacity in the GCC region should see the sector contribute positively to headline GDP again in 2023, Emirates NBD noted.“The outlook for 2023 is more cautious given the weaker external environment, although the GCC will likely continue to outperform many developed economies in terms of GDP growth,” the regional banking group said.It expects non-oil sector growth to slow to varying degrees across the GCC in 2023.2022 was a stellar year for the GCC economies, which have grown at the fastest pace in almost a decade, underpinned by a double-digit increase in oil production and strong non-oil sector activity as well. Emirates NBD estimates GCC real GDP growth at 7.4% in 2022 on a nominal-GDP weighted basis, more than double the growth rate achieved in 2021.It noted the budgets of major GCC oil producers are likely to remain in surplus this year, allowing governments to push ahead with significant investment in infrastructure and strategic sectors.This, it said, will help to mitigate the impact of weaker external demand and slowing private sector consumption and investment. Consequently, the GCC is likely to be a relative outperformer in terms of growth this year.The global economy, the analysis noted, is likely to see much slower growth this year as the aggressive monetary policy tightening of 2022 starts to bite.However, it expects energy prices to remain elevated, with Brent oil averaging over $100 per barrel in 2023, as supply remains constrained and there is limited capacity to increase production within Opec+.A faster than expected reopening of China’s economy could lead to stronger demand for oil and other commodities in the second half of 2023, Emirates NBD said.

GCC’s chemical industry has planned or committed investments worth $61bn until 2025 despite “considerable reduction” in global investments, an analysis has shown.GCC chemical producers continued to invest in environmentally responsible projects as part of their ESG agenda, mainly in energy efficiency and air pollution in 2021, Gulf Petrochemicals and Chemicals Association (GPCA) said.The GCC's share in global chemical revenue has increased to 2.4% in 2021, almost reaching the historical average.However, the GCC chemical industry’s capital investments reduced by more than half to $4bn in 2021 as companies are rationalising their investments post-pandemic, putting many projects on hold, and prioritising recovery, while others are coming close to completion.GPCA noted the GCC is well positioned as the world entered uncertain times. The regional chemical industry exceeded pre-pandemic sales figures and recorded the “highest sales value” of $95.9bn (since 2013), a 77.2% increase on sales in 2020. This was due to the increasing demand and prices of chemical products globally.GPCA said strong demand for both commodity and specialty chemicals had kept prices robust throughout 2022 as well.Although the GCC chemical industry is export-oriented, exporting 68.8mn tonnes in 2021, the region imported 20mn tonnes resulting in a positive trade balance of 48.6mn, up by 12% Y-o-Y.China and India remain the top destinations for GCC chemical exports, accounting for 26% and 14%, respectively, of total exports. Petrochemicals and polymers dominate GCC chemical exports, while value added chemicals are the top imported chemicals into the region.Global competition and collaboration have made it crucial for the GCC to establish leadership and nurture its trade relationships as more and more countries compete and collaborate with each other. The existing GCC Free Trade Agreements (FTA) with Singapore, the Greater Arab Free Trade Area (GAFTA) and the European Free Trade Association (EFTA), as well as the negotiations under consideration with the UK, India, South Korea, Australia and China and other key markets play an important role to achieve this vital objective.“Businesses in each country can focus on producing and selling goods that best utilise their resources, while other businesses import goods that are scarce or unavailable locally,” GPCA said.In terms of the chemical industry’s contribution to the manufacturing GDP, GPCA analysis finds that it behaves in a similar trend to oil prices along the years.The GCC chemical sector’s economic impact is substantial, making it a key industry in the region’s economy contributing 5.6% to total GDP and 51% to manufacturing GDP in 2021.The industry’s economic value is also demonstrated by supporting more jobs across different channels with a total employment of 210,200, and a 64% nationalisation rate, GPCA noted.

**media[5895]**Since 1998, the African Union has been seeking to create a pan-African domestic air transport market, which is clearly lagging behind the rest of the world vis-a-vis aviation development.AU’s flagship project has been aimed at improving the continent’s aviation, which has been badly hurt mainly because of the incapacity of African governments to develop the continent’s aviation industry.The African Union comprises some 55 African member states, which is committed to the AU Single African Air Transport Market (SAATM) initiative, which was rolled out in 2018.In 2002, the AU through the ‘Yamoussoukro Decision’ (YD), made it legally binding for the African countries to create a pan-African domestic air transport.However, two decades on, only 35 countries recommitted to YD under the 2018 AU Single African Air Transport Market (SAATM) initiative, and even fewer have begun implementation.According to the Aviation Week Network, only 30-35% of African cities are now connected by air and only 15% of flights use fifth-freedom rights.Adefunke Adeyemi, the new secretary general of the African Civil Aviation Commission (AFCAC), which is the AU body responsible for overseeing the liberalisation project, aims to increase fifth-freedom flying from 15% to 30% by 2025. She is also hoping to encourage more interlining between African carriers, which could lead to more efficient use of capacity.Adeyemi is planning to break the SAATM “elephant” down into more manageable chunks, made up of specific actions and targets, Aviation Week Network said. This includes grouping together countries in new ways, such as those with shared languages, whose trade would benefit most from new air links.For example, Angola, Cape Verde, Equatorial Guinea and Mozambique are all Portuguese-speaking and tourism is a major source of income, but Adeyemi is not aware of any existing air links between them.AFCAC hopes to facilitate discussions between their governments, airlines, trade-development and tourism bodies, with business in mind.Industry analysts say Africa has the oldest aircraft fleet in the world. Despite Africans representing more than 17% of the world’s population, their aircraft fleets amount to roughly 6% of global commercial passenger and cargo aircraft in 2020, the African Airlines Association (AFFRA) data indicates. This means that Africa has the lowest level of aircraft per capita of any other region in the world.For the past two decades, the average age of global aircraft fleets has varied between 10 and 12 years. In comparison, the average fleet age across Africa stands at around 17 years, the oldest of any world region.Only a few airlines in Africa such as Ethiopian Airlines, South African Airways, EgyptAir and Royal Air Maroc ensure a significant connectivity with the rest of the world.Although Africa makes up more than 17% of the world’s population, it only caters to 3.1% of the world’s air travellers.Ironically, Africa accounts for 19% of global incidents and accidents. With such a low record of safety, it is difficult to gain the trust of costumers. It has prompted some countries to even restrict their airspace to certain African airlines!A pre-pandemic estimate showed by 2035, Africa may see an extra 192mn passengers a year to make up a total market of 303mn passengers, travelling to and from African destinations.It also said the continent is set to become one of the fastest growing aviation regions in the next 20 years with an annual expansion of nearly 5%.While it is evident that aviation has the potential to fuel economic growth in Africa, several barriers still exist.One major obstacle, the International Air Transport Association (IATA) points out, is the slow pace of implementing the proposed ‘open skies programme’ in Africa.It was designed to open up Africa’s skies, allowing airlines to fly between any two African cities without having to do so via their home hub airport, boosting intra-Africa trade and tourism as a result.But progress in realising ‘African open skies’ has been rather tardy, analysts say.Despite its rosy outlook, Africa’s aviation sector still faces enormous challenges. Indeed, protectionist trends have resulted in a rather lacklustre response from many member countries, concerning competition rules, ownership and control, consumer rights, taxes, and commercial viability.Weak infrastructure, high ticket prices, poor connectivity and lack of proper liberalisation are some of the headwinds on African aviation’s path, albeit the continent currently sees an economic boom with tourism started benefiting from greater prosperity.As discussed in these columns earlier, airport infrastructure in most African countries remains outdated and cannot effectively serve the growing passengers or cargo volumes.Airlines and airports are often managed by government entities or regulatory bodies while foreign investment is generally discouraged.Undoubtedly, Africa’s aviation potential remains massive. SAATM was clearly a bold step towards unlocking Africa’s aviation potential.

Commercial Bank Group reported consolidated “record” net profit of QR2.8bn in 2022, up 22% on QR2.3bn in 2021, driven mainly by an improvement in operating income and higher contributions from its associates.The board of directors proposed a dividend distribution to shareholders of QR0.25 per share, which amounts to 25% of the nominal share value.The financials and proposed dividend distribution are subject to the Qatar Central Bank approval and endorsement by shareholders at the bank’s Annual General Meeting.The Group's balance sheet increased by 2.2% as on December 31, 2022 with total assets at QR169.1bn compared with QR165.5bn in December 2021. The increase was mainly in due from banks and investment securities.Customer deposits increased by 1.5% to QR83.2bn in December 2022, compared with QR82bn in the same period in 2021.Loans and advances to customers were flat at QR98bn in December 2022.Commercial Bank chairman Sheikh Abdullah bin Ali bin Jabor al-Thani said: “Our robust financial and operational performance for the year 2022 reflects our clear strategy and the Qatari economy’s growth over the last year. 2022 will be remembered for the successful execution of the FIFA World Cup Qatar 2022, proving Qatar’s ability to execute flawlessly on world events and draw a global audience, reinforcing its efforts to serve as an international destination for tourism, commerce, sports and culture.“Commercial Bank is privileged to have played a role in the continued development of Qatar’s banking sector particularly in the digital space and in servicing its community to the highest degree in 2022. We look forward to another positive year in 2023, in line with the country’s projected upward trajectory.”Commercial Bank’s vice-chairman Hussain Alfardan added: “Commercial Bank has seen a strong 2022 affirmed by good growth across our key segments and a healthy bottom-line which was the second consecutive year of record profit achievement. Our performance stems from our five-year strategic plans, very strong execution and Qatar’s positive macroeconomic fundamentals, which we expect to continue into the New Year.“Our robust efforts on the financial and operational front have resulted in the bank winning several significant accolades, including “Bank of the Year” in Qatar by The Banker Magazine. We continue to support the bank’s management in their efforts to position Commercial Bank as the leading bank in Qatar and look forward to continuing to realise this vision in 2023.”Commercial Bank’s Group chief executive officer Joseph Abraham commented: “Commercial Bank reported strong set of results for the year ended 31 December 2022, maintaining the momentum and strong execution of our five-year strategic plan.“Our associates continue to deliver improving performance with net profit from associates of QR222.3mn compared to the previous’ year profit of QR129.3mn.“Alternatif Bank reported a net profit of TL1,066.3mn compared to a net profit of TL76.5mn for the previous year. However, the results for 2022 are impacted by the hyperinflation accounting by TL943.2mn. With hyperinflation adjustment, the net contribution of Alternatif Bank is TL123.1mn”, Abraham said.Commercial Bank group chief financial officer Rehan Khan said: “Net provisions increased by 7.3% compared to last year due to continued prudent provisioning. Net cost of risk stood at 121 basis points, within the guidance provided for 2022.“As of December 31, 2022, NPL ratio stood at 4.9% compared to 4.7% in 2021, whilst coverage ratio strengthened to 105.4% from 97.4% in 2021 reflecting the bank’s prudent approach on credit risk management. Despite higher provisions, net profit improved by 22% compared to last year.”

The outlook for Qatar is a lot better than it is for many other countries, noted Commercial Bank Group CEO Joseph Abraham.Replying to a question by Gulf Times at a media event at the Commercial Bank Plaza Tuesday Abraham said: “I am very optimistic about the outlook as Qatar’s macroeconomic fundamentals are strong. The North Field expansion will create new business opportunities for Qatari banks. Especially on the downstream, lots of local sub-contractors will get involved. We will have an opportunity to finance them.”The North Field expansion plan, which is the global industry’s largest ever LNG project includes six LNG trains that will ramp up Qatar’s liquefaction capacity from 77mtpy to 126 mtpy by 2027.Also, Qatar’s projects on the downstream hydrocarbon sector such as the Petrochemical Complex at Ras Laffan will have a multiplier effect on the national economy.He said the FIFA World Cup Qatar 2022 has “put Qatar firmly on the global map.”This, Abraham said, will facilitate more investments and visitors to the country.“I believe the population will rise with more people coming in to implement projects such as North Field expansion and the Petrochemical Complex.”Higher energy and commodity prices are beneficial for Qatar. “And so I think that's very positive for long term.”He said: “We have also seen the debt to GDP coming down in Qatar. The government has prudently used it.”That said, Abraham noted: “There might be some imported inflation because Qatar imports commodities. But I think the impact will be mitigated to some extent with Qatar’s efforts in achieving self-sufficiency, especially in dairy and agriculture.”“And banks are the ultimately proxy for the economy. So if our economy is in good shape, we as banks can grow faster.”Abraham, however, said issues such as fears of recession, inflation and the Ukraine crisis are all challenges facing the global economy and the financial system.On Commercial Bank Group’s 2022 results, the CEO said: “We reported strong set of results for the year that ended in December 2022, maintaining the momentum and strong execution of our five-year strategic plan.“Commercial Bank Group reported consolidated net profit of QR2.8bn for the period, up 22% compared to the previous year, driven mainly by an improvement in operating income and higher contributions from our associates.”He added: “S&P Global Ratings upgraded their long-term issuer credit rating on Commercial Bank to 'A-' from 'BBB+' and affirmed the 'A-2' short-term rating. The outlook remained stable. This reflects recognition by external agencies of the strong execution of our strategy resulting in improved operating performance and strong capitalisation.”

The export value of selected petrochemicals such as methanol, ammonia, ethylene, propylene, polyethylene, and polypropylene from GECF member countries was estimated at $28.8bn in 2021, Doha-headquartered Gas Exporting Countries Forum said in an expert commentary.Polyethylene exports from GECF member countries accounted for the bulk of the petrochemical export value with a share of 44%, followed by methanol (21%), ammonia (19%), polypropylene (13%), ethylene (2%), and propylene (1%).“Given the petrochemical sector expansion plans in the GECF member countries and their competitive advantages, petrochemicals exports value may increase in coming years,” GECF’s Gas Market Analysis Department noted in the commentary.Export value of selected petrochemicals such as methanol, ammonia, ethylene, propylene, polyethylene, and polypropylene from GECF member countries was estimated at $28.8bn in 2021; Doha-headquartered Gas Exporting Countries Forum said in an expert commentaryMoreover, a significant portion of petrochemicals and fertilisers are consumed domestically in GECF member countries. Some endogenous factors are critical for determining whether to export or domestically consume petrochemical products. For example, geographic location, access to the export infrastructure such as seaports, economy's structure, climate, and agriculture sector's potential impact decision-making on whether to consume petrochemical products domestically or export them.Global natural gas consumption continues to be dominated by the power generation, industrial and residential sectors, where it is used as an energy fuel source. In the meantime, non-energy use of natural gas, mainly in the petrochemical industry, represents only 6% of global natural gas consumption - around 230bn cubic meters (bcm) per year.In this context, there is plenty of room for further penetration of natural gas in the petrochemical sector, with natural gas used as a feedstock to make higher value-added products.GECF member countries, endowed with the world's largest proven natural gas reserves, have a prominent potential to monetise their natural gas resources through developing higher value-added petrochemical products.For many countries, the establishment of a petrochemical value chain can secure a number of potential benefits for their economies and societies.These include diversification of the national economy away from one major source of export revenues; growth of the national economy, mainly through the addition of value to raw materials; sustainable export revenues amidst the volatility of oil and gas prices; potential socio-economic benefits on the state level (job creation, higher wages) and potential environmental advantages of developing the petrochemical industry.The petrochemical industry has shown significant growth in recent years, and GECF member countries continued to be the leaders in the global petrochemical industry. While each GECF member country has its own specific strengths, they have some common advantages.Firstly, the major advantage of GECF member countries is the availability of natural gas resources which is one of the key feedstock in the industry, with more than 70% of global proven natural gas reserves concentrated there.Secondly, petrochemical producers in GECF member countries are likely to enjoy low-cost feedstock, and in this context they have a competitive advantage compared to other producers, particularly in Europe and Asia, when gas prices are relatively lower than oil and coal prices.Thirdly, GECF member countries also have the relevant infrastructure and integrated supply networks. In addition, they have the well-established expertise in the managerial and technical aspects of the industry. Moreover, the Forum presents GECF member countries with a unique opportunity to collaborate and share knowledge and best practices.The GECF analysis shows that there is a great potential for its member countries to monetise their natural gas through the petrochemical industry. This is supported by their leading role as a reliable supplier of petrochemicals globally, abundance of untapped natural gas reserves and a bright outlook for demand for petrochemicals.

Qatari banks’ loan books will “remain strongest” this year because a sizeable share of their lending activities is to the government and related entities, Moody’s Investor Service said in a report.Banking sector profitability is on a firm path toward pre-pandemic levels. Economic growth, margin preservation, solid efficiency and moderate provisioning needs will support net earnings, it said.The dollar peg keeps interest rate increases tied to the US Fed hiking cycle. Rising rates will largely preserve net interest margins with a delay since US monetary policy tends to pass through to deposits and other liabilities more quickly, while loans and other assets tend to reprice with a lag, often due to competition.“This is relevant for banking sectors that rely heavily on market funding like Qatar, or in Kuwait where the central bank recently fully passed a rate hike onto deposits while the increase on the lending side was partial,” Moody’s noted.GCC Islamic banks will benefit from the rising rate cycle because they focus on higher-yielding household lending and have near-zero deposit costs.Their efficiency will remain stronger than global peers because banks have invested in IT infrastructure as well as cost-saving digital offerings and operate limited branch networks.Ongoing consolidation aims to achieve cost synergies. Qatari banks’ aggregate cost-to-income ratio is among the lowest globally (22.2% in the first half of 2022) with a small and concentrated population that does not require an extensive branch network.Provisioning costs will rise slightly after post-Covid dips but will remain contained since loan-loss reserves remain ample.The report also noted the North Field liquefied natural gas expansion project will create new business opportunities for Qatari banks.The North Field expansion plan, which is the global industry’s largest ever LNG project includes six LNG trains that will ramp up Qatar’s liquefaction capacity from 77mtpy to 126 mtpy by 2027.Strong capital provides a “substantial loss-absorbing buffer”, Moody’s said and noted GCC banks’ core capital levels are among the “highest” globally, a key credit strength.At 15% of risk-weighted assets on average, tangible common equity will continue to shield GCC banks from unexpected losses. These robust levels will remain stable, balancing loan growth with unchanged net profit retention efforts over 2023. Core capital is resilient under our low probability, high-stress scenario analysis.According to Moody’s the regulatory capital requirements in the GCC far exceed Basel III guidance. This is to capture risks posed by high concentrations of loans in economies that remain dominated by government-related entities and a few large family-owned conglomerates.Loan-loss provisioning against expected losses fully covers problem loans in Saudi Arabia, Kuwait, Qatar, Oman and Bahrain, providing an extra layer of protection to core capital cushions.Problem loans do not exceed 16% of shareholders’ equity and loan-loss reserves on average across the region, it said.

Qatar is expected to reduce its debt-to-GDP ratio by 35 percentage points of GDP by end-2023, Moody’s Investor Service has said in a report. Improvements in fiscal metrics will be the greatest in Qatar and Oman in the GCC region this year, it said.For all GCC sovereigns, sustained growth in nominal GDP following the large rebound in 2022 will continue to reduce debt-to-GDP ratios.However, in Oman and Qatar, debt burdens will also likely decline further in nominal terms as they did in 2022, as the governments prioritise deleveraging.Oman reduced its debt stock by nearly 15% in nominal terms in the year to December 2022 and Moody’s expect another, albeit much smaller, nominal debt reduction in 2023.“By the end of 2023, we expect Oman and Qatar to have reduced their debt-to-GDP ratios by around 25 and 35 percentage points of GDP, respectively, compared to peaks at the end of 2020. By contrast, in Saudi Arabia, Kuwait and the UAE, where government debt is relatively low, we expect governments to prioritise accumulation of liquid fiscal reserves and sovereign wealth fund assets.“Kuwait is the standout, with nearly no debt to repay in 2023 out of its already very small debt stock of only 3% of GDP at the end of 2022,” Moody’s noted.According to Moody’s another year of fiscal surpluses will allow GCC governments to consolidate the reductions in debt burdens and improvements in debt affordability, which took place in 2021-22.In most cases, greater debt affordability will be sustained despite rising global interest rates as relatively long maturities of existing government debt will delay repricing of the outstanding debt stock.Governments will also have the opportunity to use their surpluses to rebuild fiscal buffers that were eroded over the 2015-20 period.In some cases, these buffers are already very large and significantly exceed government debt, lending material support to our assessment of the sovereigns' fiscal strength.As of 2021, government financial assets amounted to around 340% of GDP in Kuwait, 280% in the United Arab Emirates, and 185% in Qatar. The assets were more modest, but still large by international comparison, in Saudi Arabia (around 33% of GDP) and Oman (26% of GDP).Moody’s noted high oil prices will continue to bolster GCC sovereigns' credit quality in 2023.“We assume Brent crude oil will average around $95/barrel, below the 2022 average of $100/b, but significantly above the average of $57/b in 2015-21,” the report said.Although GCC crude oil output is likely to decline in 2023 on strategic production cuts by Opec+, hydrocarbon revenue will remain robust, allowing most GCC sovereigns to run substantial fiscal and current account surpluses.These surpluses will offer governments a further opportunity to pay down debts, rebuild fiscal reserves, accumulate foreign-currency buffers, and advance structural reforms and diversification projects.Stronger government balance sheets and more diversified economies will increase resilience to future economic and fiscal shocks, while reducing government liquidity and external vulnerability risks.“Even if oil prices fell to around $80/barrel, we expect most GCC governments would avoid a material rebound in debt burdens and deterioration in debt affordability,” Moody’s noted.

Qatar’s investments for the World Cup have been done for the country’s future and economic diversification as part of QNV 2030, said HE the Minister of Finance Ali bin Ahmed al-Kuwari.In an interview with CNN’s Richard Quest at the World Economic Forum at Davos, al-Kuwari discussed what was next for the country after the success of FIFA World Cup Qatar 2022.Al-Kuwari said, “World Cup is only one month...and nobody would do a huge investment or prepare only for one month. So what we have been doing with the investments...infrastructure ... it's for Qatar. It's for the future of Qatar. This is part of our principles. And it is part of our diversification journey.”On Qatar budget surplus (of $8bn in the third quarter of 2022), al-Kuwari said, “We have a very clear and disciplined fiscal policy framework. This is already approved by the government. And this decides how we do and how we deal with surpluses. Our surplus goes to Qatar Investment Authority for investments as part of our diversification.”Al-Kuwari said, “Our economy today is 57% non-hydro-carbon. Only 43% is hydrocarbon. Most of the growth we see in our economy today comes from the non-hydrocarbon sector. But in reality, we are dependent on the hydrocarbon sector...and on the prices of oil. That’s why we have achieved an excellent surplus in the nine months of last year...9% GDP growth. This year also we are projecting a 3.5% growth in our GDP.”The minister also listed out global recession, inflation, ongoing war in Ukraine and energy crisis as major concerns for the global economy.

**media[5895]**China recently removed quarantine requirements for inbound travellers and green-signalled international travel, abandoning its ‘Covid Zero’ policy in favour of reopening of its economy.While it has come as a surprise to many, given the relapse in Chinese Covid cases again, some analysts believe the country’s swift reopening may offer a boost to the flagging world economy.The growth impulse will be felt through service sectors such as aviation and tourism as Chinese people pack their bags for international travel for the first time since the pandemic. Tourism-reliant nations in Southeast Asia will likely be among the first to note a pick up, with developed economies also benefiting from the return of Chinese visitors.According to prominent aviation analyst John Grant, in 2019, China was the fifth largest international market in the world with over 102mn seats per year, of which Chinese carriers accounted for 53.8mn, or a 52% share of the market.But in 2022, China had slipped to 51st spot in global rankings with just 7.4mn international seats - just ahead of Ethiopia, but behind Cyprus - by any measurement a “staggering collapse” of position, he says.The current international market from China is just 7% of its pre-pandemic levels. Although the locally based airlines flipped a considerable amount of their capacity from 2020 to domestic services, the simple truth, he says is that the financial results have been crippling for many airlines.“While the rest of the airline industry was reporting record revenues for the third quarter of 2022, China’s major airlines were reporting eye-watering losses,” Grant wrote in OAG, global travel data provider.The Chinese Lunar New Year commences on January 22 and the “Year of the rabbit” is supposed to bring prosperity, which is rather apt for the current situation facing the local airlines.Over the last few months airlines will have been taking reservations for the busy weeks of travel during the Spring Festival (January 22-28) and while domestic flying has proven to be unprofitable this holiday period would have been one of the peak weeks for demand with some hope of profitability.Many airlines likely have far too many forward bookings that will prevent them from adjusting and changing their planned services; frustrating, but something that couldn’t be easily overcome.The second factor to consider, Grant noted, is that most airlines had no flights on sale to and from China (and certainly not to the previous levels of pre-pandemic capacity).For most international airlines operating to China has been challenging, limitations on capacity that could be sold, damaged operating performance, expensive penalties of presenting Covid-infected passengers and crewing restrictions added further complexity.For many international airlines operating to China had become a case of “holding a position” and "staying in the market" with some presence awaiting the return of the market.The easing of travel restrictions in China was sudden, but Grant insists it will not result in a sudden change of capacity or rapid switching of schedules towards international flights; at least not in the next three to four months.“By surprising everyone, the Chinese authorities have failed to recognise the planning that is required to reopen markets that had been closed for nearly three years or understood the challenges airlines are facing in adding more capacity at short notice,” he said.However, despite all those challenges China may once again become a major international market over the next year. Short-haul regional demand from China to major leisure markets such as Thailand, Vietnam, Japan and South Korea will noticeably grow in the second half of the year and by the last quarter of the year the outlet malls of Europe and North America will once again be accepting ‘Alipay’ in all the shops.“China might not quite be the hot spot for international growth that some expect in the first half of the year, but heading into 2024 and beyond it will once again be in the top five international markets in the world, and that will be some recovery in twelve months,” Grant noted.Meanwhile, more countries are now demanding that visitors from China take Covid tests, although Beijing warned of possible reciprocal measures after the European Union and some other Asian countries recommended pre-departure testing for Chinese passengers.The global aviation industry, battered by years of pandemic curbs, has also been critical of the decisions to impose testing on travellers from China.That said, the World Health Organisation has warned that the holiday, which starts on January 21 and usually brings the biggest human migration on the planet as people head home from cities to visit families in small towns and villages, could spark another infection wave in the absence of higher vaccination rates and other precautions.Chinese authorities expect 2.1bn passenger trips, by road, rail, water and air, over the holiday- double last year’s 1.05bn journeys during the same period. Country’s transport ministry has urged people to be cautious to minimise the risk of infection for elderly relatives, pregnant women and infants.One region poised to be a major beneficiary of China’s opening is Southeast Asia, where countries have not demanded that Chinese visitors take Covid tests.

High oil prices have boosted the balance sheets of several issuers in core Islamic finance countries including Qatar, S&P Global said and noted sukuk slump may slow but not stop in 2023.Total sukuk issuance globally dropped to $155.8bn in 2022, S&P said as it forecasts a further decline in total issuance to about $150bn this year.“We believe lower and more expensive global liquidity, increasing regulatory complexity and reduced financing needs in some core Islamic finance countries will hold back the market this year,” S&P said citing countries such as Qatar and the UAE in its report.In others, where government transformation visions are being implemented - such as Saudi Arabia - S&P said it expects somecorporates to hit the sukuk market because the banking system won't be able to absorb all the investments.It also expects the Saudi government to continue issuing sukuk in local currency to develop the local capital market, although recent pressure on banks' liquidity resulted in lower activity than 2021.S&P Global Ratings believes that sukuk issuance volumes will continue to decline in 2023, albeit at a slower pace than 2022.“We expect lower and more expensive global liquidity, increased complexity, and reduced financing needs for issuers in some core Islamic finance countries to deter the market.Notably, future standards development and certain Shariah scholars' preference for a higher proportion of profit-and-loss sharing in sukuk could pose additional legal challenges, in its view.“We continue to believe that if sukuk become an equity-like instrument, investor and issuer appetite will likely diminish significantly, in particular amid already expensive liquidity.“However, we see supportive factors in other areas. Corporates are likely to contribute to issuance volumes, particularly in countries with government transformation visions or plans, such as Saudi Arabia, where well capitalised banking systems will not have the capacity to finance all the projects,” S&P said.S&P also sees continued momentum via the energy transition and increased awareness of environmental, social, and governance considerations among issuers in key Islamic finance countries. However, the sukuk market seems to be lagging the conventional one when it comes to automation and issuance of digital instruments, which could accelerate growth and make the process more appealing.On why sukuks are unlikely to recover this year, S&P noted Islamic bonds are more complex and time-consuming than conventional ones.Therefore, new issuers are mainly taking the Islamic route because they expect to increase their investor base compared with purely conventional transactions.Regulatory uncertainty remains high and resides in the fragile equilibrium between making sukuk a fixed-income instrument and Shariah scholars' push for more profit-and-loss sharing.In its view, if sukuk lose their fixed-income characteristics while adding significant risks compared to bonds they will become a less attractive option, reducing the market's prospects.Despite the natural alignment of Islamic finance and sustainable finance, sustainability sukuk issuance remains limited, albeit expanding.“From green to social, we expect to see higher volumes as issuers meet investor demands and core Islamic finance countries seek to reduce their carbon footprints,” S&P said.

Qatar debt issuance stood at $3.9bn in 2022, a research by the National Bank of Kuwait has shown.GCC domestic and (USD) Eurobond gross issuance reversed its declining trend, increasing to $15.9bn in Q4, 2022 (fourth quarter last year) from $11.8bn in Q3 and $14.7bn in Q3.Improving fiscal positions supported by higher oil prices in 2022 helped the GCC governments lock in tighter spreads over US treasuries, despite lower financing needs, the report said.National Bank of Kuwait said increasing interest rates and reduced sovereign financing needs may limit the flow of new issuances in the GCC region.During most of 2022, the amount of new issuance fell due to rising debt-servicing costs, reduced deficit financing needs amid elevated oil prices, and commitments to medium-term fiscal reforms.However, the rise in new issuance in fourth quarter last year, particularly in Saudi Arabia, could be attributed to the government’s willingness to lock in tighter spread over US treasuries as the region continues to benefit from high oil revenues and improving fiscal positions.GCC medium-term sovereign bond yields fell in Q4,2022, unlike their global peers, as strong fiscal balances and robust non-oil growth outlooks boosted the attractiveness of regional bonds amid a falling supply of new benchmark papers.GCC central banks also ratcheted up benchmark rates in response to the rise in US Fed rates.GCC bond yields will continue to follow global markets broadly and could reverse some of the gains given still-high inflation and the possibility of further rate hikes by the Fed.That said, still-elevated oil revenues and much improved fiscal positions could lessen the potential for significant increases in regional bond yields, given lower financing needs.Globally, sovereign bond yields rose sharply in October before retreating later as the outlook for inflation appeared to moderate.However, a continued hawkish commentary by central banks pushed yields higher in the second half of December. GCC medium-term sovereign bonds outperformed their global peers, closing the final quarter of 2022 on a better note and posting quarter-on-quarter (q-o-q) declines in yields.The latest inflation print for most economies indicated that the worst phase of rising consumer prices has likely passed, although prices are still significantly elevated compared to pre-2022 years.In addition, the price momentum seems to be shifting from goods (such as energy) to services, which could keep the core inflation rate relatively elevated over the coming months.Major global central banks in December downshifted to interest rate hikes of 50 bps, following outsized increases earlier in the year.“Further rate hikes are likely in H1, 2023 given still-elevated consumer prices and a tighter job market, which could keep bond yields high from a historical perspective. Inversely, any policy pivot towards rate cuts during the latter part of 2023 should drive a rally in bond prices and hence lower yields for benchmark paper,” National Bank of Kuwait said.

WTI crude may average $86.6/barrel and Brent $91.9 in 2023, Visual Capitalist said in its ‘Guide to 2023’, part of the global 2023 forecast series- VC+.Energy was the S&P 500’s top performing sector two years in a row, and many experts feel that more growth is on the horizon.The global system that supplies energy is breathtakingly complex, with a lot of unpredictable factors at play. Of all factors, conflict can create the most volatility, and 2023 has a number of geopolitical risks that could impact energy supplies.First, Europe will continue to diversify its energy imports away from Russia. Recently, liquefied natural gas from the US has helped fill gaps.Iran could be a flashpoint in the Middle East this year, Visual Capitalist noted.A brewing conflict in the region could cause instability, which will have knock-on effects on the energy industry — particularly in the event of attacks on oil and gas infrastructure.A few other factors to consider this year according to Visual Capitalist are: The US Energy Department aims to replenish its Strategic Petroleum Reserve, easing of US sanctions on Venezuela could lay the ground work for increased oil production, in post-zero-Covid China, economic activity will increase, pushing up demand, and in the UK, the energy price guarantee will rise in April, meaning higher energy bills for households.

Qatar’s GDP per capita is set to scale up to $111,047 in 2027 from $85,306 this year, on the back of nation’s economic growth driven by higher LNG revenues from North Field expansion, a report has shown.According to FocusEconomics, Qatar’s GDP per capita will rise to $85,573 in 2024, $94,693 in 2025 and $103,218 in 2026.The country’s GDP, FocusEconomics said, will rise to $279bn in 2027 from $223bn this year. Next year, the researcher estimates Qatar’s GDP to total $222bn, followed by $243bn (2025) and $262bn (2026).Qatar’s GDP growth is expected to be 2.6% this year and in 2024, 5% (2025), 4.6% (2026) and 4.5% (2027).“Growth will slow this year as the tailwind from the World Cup disappears, interest rates rise and external demand weakens. However, ongoing gas sector development will provide support,” the researcher noted.A long-term tourism boost from the World Cup and improved relations with Arab neighbours are upside risks, while a sharper-than-expected global downturn is a downside risk, FocusEconomics said.Qatar’s fiscal balance (as a percentage of GDP) will be 8.5 this year 6.1 (2024), 5.3 (2025) 6.7 (2026) and 6.5 (2027).Current account balance (as a percentage of GDP) will be 17.8 this year 13.6 (2024), 10.7 (2025), 14.6 (2026) and 15.9 (2027).Current account balance in dollar terms will be $39.8bn this year, $30.3bn (2024), $25.9bn (2025), $38.2bn (2026) and $44.4bn (2027).Merchandise trade balance in dollar terms will be $85.3bn this year, $81.9bn (2024), $76.7bn (2025), $85.4bn (2026) and $97.5bn (2027).FocusEconomics said the country’s pubic debt (as a percentage of GDP) has been estimated to be 39.3 this year, 38.2 (2024), 36.8 (2025), 37.6 (2026) and 35.9 (2027).Unemployment (as a percentage of active population) will remain at a meagre 0.2 until 2027, the researcher said.The non-oil private sector lost steam in Q3 2022, according to PMI data, while the oil sector was robust, with energy production rising around 8% year on year in July–August.Turning to Q4, 2022, the FIFA World Cup, which was held in November/December, should have provided a notable economic boost.“It reportedly drew 0.8mn visitors in the first two weeks alone — for comparison, Qatar saw roughly 2mn foreign visitors in the whole of 2019. This should have spurred the private services sector, although public-sector activity will have been dampened by the decision to reduce school and government office hours for the duration of the event,” FocusEconomics said.Inflation rose to 5.3% in November from 5% in October. The Qatar Central Bank hiked the lending rate by 50 basis points to 5.5% in December to match the US Federal Reserve. Inflation is expected to decline this year as commodity prices recede, interest rates rise further and the economy cools.FocusEconomics panellists see inflation averaging 3.1% in 2023, which is up 0.1 percentage points from last month’s forecast, and 2% in 2024.Last month at an interaction with Qatari media in Doha, HE the Minister of Finance Ali bin Ahmed al-Kuwari said Qatar expects to achieve a double-digit growth by 2027, driven primarily by higher LNG revenues from the North Field expansion.The North Field expansion plan includes six LNG trains that will ramp up Qatar’s liquefaction capacity from 77 mtpy to 126 mtpy by 2027.Four trains will be part of the North Field East and two trains will be part of North Field South project.Already, QatarEnergy made significant strides in realising the North Field Expansion by choosing partners this year for both North Field South (NFS) and North Field East (NFE) expansion, which is the global industry’s largest ever LNG project.