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Driven by higher LNG revenues from the North Field expansion, Qatar expects to achieve a double-digit growth by 2027, said HE the Minister of Finance Ali bin Ahmed al-Kuwari.Addressing editors of various Qatari media outlets in Doha Tuesday al-Kuwari said the national economy is expected to grow by 4.5% in 2023 as per International Monetary Fund (IMF) calculations.At the event, al-Kuwari made a presentation on Qatar’s budget for the fiscal year 2023, which has set spending at QR199bn with total revenue of QR228bn, generating an estimated surplus of QR29bn.Qatar’s oil revenue is expected to be QR186bn and non-oil revenue QR42bn in 2023.Higher revenue projected for next year (QR228bn) has been mainly due to the adoption of an average oil price of $65 per barrel for fiscal 2023 in place of $55 per barrel in 2022.“This increase is the result of a remarkable recovery in global energy prices during the current year, which international financial institutions estimate will continue to rise in the medium term. Total oil and gas revenues for the next year are estimated at QR186bn compared to QR154bn in 2022, which represents an increase of 20.8%,” al-Kuwari noted. The conservative figure of $65 per barrel on which the 2023 budget has been based is part of the strategy of the Ministry of Finance to allocate financial resources towards existing commitments expected during the year to fund National Development Strategy (NDS) programmes and projects.Non-oil revenues for 2023 remain stable at QR42bn, compared to the 2022 budget, he said. The Ministry of Finance is currently co-ordinating with relevant authorities to follow up on the implementation of some measures that would increase non-oil revenues during 2023.Some of these measures, al-Kuwari noted, will include expanding the list of goods covered by excise tax and reviewing some government fees.“Estimates of revenues resulting from the possible implementation of these measures (during 2023) were not added to the budget based in line with the Ministry of Finance’s conservative approach to public revenue estimates,” the finance minister said.Al-Kuwari noted that Qatar continues to focus on the health and education sectors, with QR21.1bn allocated to the health sector, about 11% of the total expenditures, and QR18.1bn for the education sector, nearly 9% of the total expenditures.On the other hand, he said spending on the culture and sports sector is estimated at QR9.3bn, compared to QR16.6bn in the 2022 budget, or 5% of the total budget. The decline in spending on the culture and sports sector is attributed to finalising all projects tied to the hosting of the FIFA World Cup Qatar 2022 and related expenses.Qatar to implement VAT only after ‘comprehensive’ studyQatar will implement value added tax (VAT) only after a comprehensive study, HE the Minister of Finance Ali bin Ahmed al-Kuwari said Tuesday.“We have not set any timeframe for VAT implementation,” he said in reply to a question at a media event Tuesday.The VAT framework treaty adopted by the GCC has called for each member state to impose a 5% VAT on designated goods and services.“We will look at tax regime from all facets seriously to see its impact on the citizens and society,” al-Kuwari said.

GCC countries will benefit the most from international energy market developments in 2023, the Economist Intelligence Unit said and noted they will see high oil and gas revenue spillover and help to drive business activity in non-energy sectors — especially through state-backed investment in economic diversification projects.Major oil and gas producers in the Middle East have benefited substantially from strong global demand, rising output and high prices for their energy exports in 2022, and the region’s net energy exporters — except Iran — can look forward to another year of “decent returns” from international markets in 2023.The Opec+ alliance will solely prioritise price levels, despite concerted diplomatic efforts by the US and European allies to persuade the cartel to increase production.The recent move by Opec+ to cut output by 2mn barrels per day will be borne by Saudi Arabia and, to a lesser degree, the UAE.The actual cut to output will be about half the headline figure, as several major producers, most notably Nigeria and Russia, are producing well below their current quotas.“We expect Opec+ to maintain its solidarity and forecast that oil prices will remain above $90/barrel until at least mid-2023,” EIU noted.The region’s travel and tourism industry is showing “strong signs of recovery” and international visitor arrivals could return to pre-Covid levels by the end of 2023 — largely owing to effective promotional campaigns, major investments and the release of pent-up demand, EIU noted.Domestic tourism has supported a “depressed” market in recent years and this will continue to be an important outlet for the tourism sector, along with regional arrivals.International arrivals to the GCC were back on an upswing and accelerated quickly in late 2021 and in 2022, and looking ahead they will be aided by vaccine rollout and safety measures, lighter travel restrictions, a further promotional drive and the release of pent-up demand for travel and tourism.In the longer term, travel, tourism and hospitality are identified as key ingredients of strategic growth plans and consequently are subject to pro-business and pro-investment reforms as well as receiving substantial investment from the public and private sectors.Inflation will be contained across the GCC in 2023 by exchange-rate pegs to the dollar and fuel subsidy regimes, EIU said.Elsewhere, elevated price pressures will weigh heavily on economic growth and stability in the region’s more troubled states and some major energy importers in the region.“The balance of risks to the region’s outlook is heavily weighted to the downside, which reflects various global and regional shocks that could act to undermine economic growth and stability, social cohesion and security.“Upside risks are limited to a low-probability scenario surrounding a quick resolution of the war in Europe leading to less volatility in commodity markets — food and fuel — and easing prices pressures, as well as the low risk of a stronger rebound of demand from China as Covid-19 disruption dissipates and the authorities guide the economy to much faster growth,” EIU said.

For many countries, one easy way to shore up depleted treasuries seems to be preventing foreign airlines from repatriating funds.In the last six months, the amount of airline funds for repatriation being blocked by governments has risen by more than 25% to $394mn. Total funds blocked now tally at close to $2bn, according to the International Air Transport Association (IATA).Airline funds are being blocked from repatriation in as many as 27 countries and territories. Last year, some 20 countries owed $1bn to airlines worldwide.Venezuela topped the list with $3.8bn of blocked airline funds since 2016. IATA has urged the Venezuelan government to settle the airline funds that have been blocked from repatriation since 2016 when the last authorisation for limited repatriation of funds was allowed by it.The other top markets with blocked funds are: Nigeria: $551mn, Pakistan: $225mn, Bangladesh: $208mn, Lebanon: $144mn, and Algeria: $140mn.IATA’s Director General Willie Walsh said: “Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price.“No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is a critical for any economy to remain globally connected to markets and supply chains.”The industry has to tackle the issue of blocked funds at a time when it is slowly recovering from one of the worst crisis hitting it in recent decades following the pandemic.IATA expects net airline industry losses of $6.9bn in 2022. This is significantly better than losses of $42bn and $137.7bn that were realised in 2021 and 2020 respectively.In 2023, airlines are expected to post a small net profit of $4.7bn — a 0.6% net profit margin. It is the first profit since 2019.Passenger numbers could surpass the four billion mark for the first time since 2019, with 4.2bn travellers expected to fly. However, the Covid situation in China and many other countries remain a major concern.Overall costs are expected to grow 5.3% to $776bn. That growth is expected to be 1.8 percentage points below revenue growth, thus supporting a return to profitability. Cost pressures are still there from labour and capacity shortages. Infrastructure costs are also a concern.In terms of blocked funds in Nigeria, repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.Despite these challenges, Nigerian authorities have been engaged with the airlines and are, together with the industry, working to find measures to release the funds available.“Nigeria is an example of how government-industry engagement can resolve blocked funds issues. Working with the Nigerian House of Representatives, Central Bank and the Minister of Aviation resulted in the release of $120mn for repatriation with the promise of a further release at the end of 2022. This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity,” said Kamil al-Awadhi, regional vice-president (Africa and the Middle East).Airlines have also restarted efforts to recover the $3.8bn of unrepatriated airline revenues in Venezuela. There have been no approvals of repatriation of these airline funds since early 2016 and connectivity to Venezuela has dwindled to a handful of airlines selling tickets primarily outside the country.In fact, between 2016 and 2019 (the last normal year before Covid-19) connectivity to/from Venezuela plummeted by 62%. Venezuela is now looking to bolster tourism as part of its Covid-19 economic recovery plan and is seeking airlines to restart or expand air services to and from Venezuela.Success will be much more likely if Venezuela is able to instil confidence in the market by expeditiously settling past debts and providing concrete assurances that airlines will not face any blockages to future repatriation of funds.  Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

Higher budget surplus in the first three quarters of this financial year denotes favourable oil and gas prices, which clearly helps Qatar to manage its assets and debts quite remarkably.Recent data from the Ministry of Finance showed Qatar’s financial surplus exceeded QR77bn in the first nine months of 2022 compared to QR4.9bn during the period in 2021.Revenues during the first nine months of 2022 reached QR232.6bn, with QR193.9bn coming from oil and gas, and QR38.6bn from non-oil revenues, exceeding the 2021 total revenue of QR193.7bn.Thrice in the last 10 years, Qatar achieved similarly huge surpluses: 2012 (QR77bn), 2013 (QR106.3bn), and 2014 (QR108.6bn).“The 2022 budget surplus is mainly due to the remarkable control over expenditures and the rise in revenues with the recovery seen in oil prices,” the Ministry of Finance said.Qatar’s 2022 budget has been based on a conservative price of $55 per barrel.According to QNB Economics, crude oil prices could see a further upside, as the bank expects physical markets to tighten further on the back of supply constraints and stronger global demand.QNB expects prices to be well supported in a range of between $90 and $115 per barrel over the coming quarters.“On the demand side, after several quarters of negative economic growth de-ratings by analysts and international organisations, there is now scope for a more positive outlook. In fact, we expect stronger than previously anticipated economic growth in all major economies over the next couple of quarters, including in the US, Europe and China,” QNB Economics said.In a recent report, researcher FocusEconomics noted Qatar’s public debt will decline over the next four years from 45.5% this year to 38.7% of GDP in 2026.Next year, the country’s public debt has been estimated to be 39.9%, 40.8% in 2024 and 39.7% (2025).“With higher oil and gas prices and improved local liquidity situation, there is less reliance on non-resident deposits and optimisation in funding sources for (local) banks,” an analyst told Gulf Times.FocusEconomics researchers’ see a 4.5% rise in Qatar’s GDP during 2022, which is unchanged from last month’s forecast and 2.7% growth in 2023.GDP growth over the next four years has been forecast at 2.7% (2023), 2.9% (2024), 3.6% (2025) and 4.3% (2026).Also, Qatar is set to record its “fastest” GDP growth in seven years in 2022, FocusEconomics said and noted the gross domestic product will touch $216bn this year.

In addition to turning into a sporting destination, Qatar is also "vying to host" a variety of business forums and conferences as it seeks to establish itself as a business hub in the GCC, Alpen Capital has said in a report.This, the researcher noted, will provide impetus to Qatar’s retail market in the coming years.In addition to the ongoing FIFA World Cup Qatar 2022, some of the major international sporting events lined up to take place in the country include the Formula 1, TP Tennis Competition, International Golf Championship, the World Championship of Motorcycles, 2024 World Aquatics Championships, the 2030 Asian Games, European Tour Golf, and the MotoGP among others.Moreover, Qatar has been hosting several events in the run up to the 2022 FIFA World Cup – helping the industry recover from the lows of 2020.Consequently, Alpen Capital noted, tourist arrivals in the country increased by 5% y-o-y in 2021 while total travel and tourism spending revenues reached $16.5bn, contributing 10.3% to the country’s GDP – the highest amongst the GCC nations."All these factors are estimated to have helped revive the retail industry in Qatar," Alpen Capital said.As of H1, 2022, supply of organised retail space within malls in Qatar reached 1.7mn sq m, reflecting an increase of more 160% since 2015, Alpen Capital said.The size of Qatar’s wholesale and retail trade grew at a CAGR of 12.3% between 2015 and 2020 to reach $26.7bn, accounting for 15% of the GDP.The wholesale and retail trade contribution to GDP has remained stable over the years, indicating the growing importance of the industry within the economy. Despite the Covid-19 pandemic causing business disruptions, Qatar’s retail industry fared well during 2020 as the majority of stores and malls were allowed to reopen by summer with a range of mandatory health guidelines in place.During this period, the country witnessed several changes in consumer behaviour, especially in terms of buying patterns, spending trends, payment solutions, and utilisation of e-commerce platforms, Alpen Capital noted.The use of e-commerce witnessed a significant boost as consumers were forced to stay at home and rely on online channels. As per the Ministry of Transport and Communications, about 60% of the consumers in Qatar signified a desire to shop online.This led to the country’s retailers to restructure their strategy to incorporate online sales platforms.Consequently, many retailers in Qatar have moved to a blended, omni-channel distribution strategy, which involves boosting and expanding their digital offerings while also maintaining a brick-and-mortar footprint.However, the phased easing of Covid-19 restrictions in 2021 resulted in an encouraging return to pre-lockdown footfall levels in most retail malls.Consequently, the country’s retail market is estimated to have recovered from the slowdown during the pandemic, due to overall economic activity improving during the first year of the pandemic while inflation remained in the negative territory, Alpen Capital said.

Beyond the Tarmac Incidents involving disruptive passengers seem to have increased manifold following the Covid-19 pandemic, which forced countries around the world to enact strict laws on physical distancing and wearing masks on commercial airlines and other modes of transport. With passengers returning to the skies in growing numbers as governments ease Covid-19 related restrictions, it is essential that travellers understand the unacceptability and possible legal consequences of unruly or disruptive behaviour in aviation facilities and onboard aircraft. Unruly passengers remain a major concern for air carriers worldwide. While serious disruptive behaviour remains rare, it can often be costly and cause aircraft delays. Unruly passenger incidents include violence against crew and other passengers, harassment, verbal abuse, smoking, failure to follow safety and public health instructions and other forms of riotous behaviour. Although such acts are committed by a minority of passengers, they have a disproportionate impact. They create inconvenience, may threaten the health, safety and security of other passengers and crew, and can lead to significant operational disruption and costs for airlines. Evidence indicates that unruly and disruptive passenger incidents increased during the Covid-19, driven by non-compliance and flouting of face mask requirements and regulatory mandates put in place in an effort to further reduce the potential transmission of the virus to other passengers and crew. “We have seen a marked decrease in the reporting rates in areas where mask mandates were removed,” says the International Air Transport Association. Gaps in in the Tokyo Convention 1963 (TC63), which governs offences and certain other acts committed on aircraft means that many unruly passengers escape punishment for their misconduct. The main issue is that the country, where an aircraft is registered has jurisdiction over offences committed onboard. This causes problems at overseas airports, where local police may not have jurisdiction to deal with incidents that occur onboard foreign registered aircraft. This means unruly passengers are often released without charge which undermines the deterrent. IATA member airlines state this is the reason for prosecutions not proceeding in around 60% of unruly passenger cases. To address this, the association lobbied effectively for the International Civil Aviation Organisation (ICAO) to conduct a thorough review of TC63 in 2009. Countries agreed that amendments were needed, and this resulted in the Montreal Protocol 2014 (MP14). MP14 amends TC63 by extending jurisdiction over offences to the state of intended landing (destination) in addition to the state of aircraft registration. Other changes give greater clarity to what at a minimum constitutes unruly behaviour and reinforces the right of airlines to seek recovery of the significant costs from unruly passengers. MP14 entered into force in January 2020, following ratification by 22 ICAO Member States. Since then, further states have ratified bringing the current total to 41 with eight more becoming parties so far in 2022 including Kenya, Luxembourg and Romania. However, despite this progress, TC63 still covers around two thirds of global traffic. The more states ratify MP14 the more the jurisdiction gaps can be closed so that unruly passengers can be prosecuted according to uniform global guidelines. IATA announced changes in its reporting system to get a more accurate picture of the extent and nature of unruly passenger incidents. However, the last full year of statistics available under the (previous) reporting system showed that in 2017 the rate was one incident for every 1,053 flights. The top three issues were non-compliance with safety regulations, alcohol or other intoxication, and non-compliance with smoking regulations. Between 2007 and 2016, more than 58,000 unruly passenger incidents were reported on aircraft in-flight, data available with association show. These incidents include violence against crew and other passengers, harassment and failure to follow safety instructions. The global aviation industry led by IATA has recognised that it must do all it can to prevent incidents from happening to the extent possible. In addition to providing airlines with comprehensive guidance materials covering issues such as conflict de-escalation, responsible service of alcohol and restraint, the association is participating in several ongoing public-facing campaigns aimed at raising awareness among passengers of the types of prohibited conduct onboard and the consequences of irresponsible and criminal behaviour. Undoubtedly, preventing unruly incidents from happening in the skies and managing them effectively when they do occur is critical to the safety of global aviation.

The stronger dollar has supported the dollar-pegged Qatari riyal (at QR3.64), and there is only a very small chance of de-pegging, Oxford Economics said in its latest country report.Qatar’s exchange rate risk on an Oxford Economics data-driven methodology is now 2.3, up 0.2pts from six months ago but well below the Mena average of 4.5.The low risk score reflects the authorities’ long-standing commitment to the dollar peg, as well as large FX reserves. Risk rose in 2020 as the current account moved into deficit, but the score improved as the current account moved back to surplus in 2021, as exports recovered and oil and gas prices improved from the lows in 2020.The current account surplus has widened this year and will average 15% of GDP in 2022-23, Oxford Economics said.The sovereign credit risk score under Oxford Economics methodology is 3.4, unchanged from six months ago and well below the Mena average of 4.5. The score, it said reflects very high per capita incomes, large government reserves, strong external finances, and political stability.The budget deficit in 2017 was temporary, and the budget returned to surplus in 2018. However, it began to narrow again in 2019 and, given the slump in oil and gas prices, moved into deficit of 2.1% of GDP in 2020.The balance returned to surplus in 2021, which should rise close to 9% ofGDP in 2022-2023 due to higher oil and gas revenues, Oxford Economics said.The country’s trade credit risk – a measure of private sector repayment risk – remains very low by regional standards at three, compared with the regional average of 6.1. The main factors underpinning this rating are macroeconomic stability, the credible and well-established exchange rate regime, strong growth, very high GDP per capita, and a healthy, well-developed banking sector, the researcher noted.Higher oil prices should support bank liquidity, despite rising exposure to construction and real estate and persistent foreign funding risk.Concerns about the deteriorating global outlook have yet to overshadow the boost to Qatar from the month-long World Cup tournament, which ends on December 18.“We expect Qatar's recovery will continue in 2023, with strong gas demand continuing to support energy exports and output. That said, the fall in the manufacturing PMI below the 50-mark in October indicates moderating non-oil sector activity, consistent with our 2023 GDP growth forecast of 2.7%, after the 5.2% expansion seen this year,” Oxford Economics noted.

Qatar’s hosting of the FIFA World Cup and the AFC Asian Cup in 2023 will build the momentum towards travel and tourism recovery in the GCC region, the Economist Intelligence Unit (EIU) has said in a report.In its latest ‘Middle East outlook 2023’, EIU noted business activity, revenue and profitability in the travel, tourism and hospitality industries in the Middle East have taken a major hit in recent years stemming from the Covid-19 pandemic and then the Russian invasion of Ukraine.However, a corner appears to have been turned and momentum is building with international arrivals on the upswing in 2022 and a full recovery to pre-Covid levels of arrivals expected in late 2023 (or early 2024).“The recovery will be aided by major sports and cultural events — Qatar is hosting the FIFA World Cup in November and December 2022 and the AFC Asian Cup in 2023, while Saudi Arabia will increase the numbers of foreign visitors allowed to attend the annual Haj pilgrimage.“These and other locations, including major tourism hubs in the UAE and Oman, are redoubling their efforts to promote their tourism offer in major export markets in Europe and Asia, as well as reassuring visitors through high-level health and security measures,” EIU said.Domestic tourism, it said has supported a depressed market in recent years and this will continue to be an important outlet for the tourism sector, along with regional arrivals.International arrivals to the GCC were back on an upswing and accelerated quickly in late 2021 and in 2022, and looking ahead they will be aided by vaccine rollout and safety measures, lighter travel restrictions, a further promotional drive and the release of pent-up demand for travel and tourism.In the longer term, travel, tourism and hospitality are identified as key ingredients of strategic growth plans and consequently are subject to pro-business and pro-investment reforms as well as receiving substantial investment from the public and private sectors, EIU noted.In the report, EIU said business conditions across the Middle East will differ greatly by country in 2023. Business conditions in the GCC states will be the most favourable in the region, supported by buoyant energy sectors, the recycling of oil funds into the wider economy and ongoing business and economic reform programmes.Strong purchasing managers’ indices (PMIs), which record business activity in the non-oil private sector with a 50 threshold that separates expansion from contraction — for most GCC states are suggestive of relative health and momentum of non-energy private business sectors in the short term.Competition between Saudi Arabia and the UAE to establish leading business hubs will intensify, although this will also create space for co-operation and joint ventures given the scope for mutual benefit and the pragmatic nature of intra-GCC business investment.“GCC states will continue to push for openings in new sectors and to attract foreign private investment, which will be supported by well-capitalised, profitable and strong financial sectors and already enacted pro-business reforms,” EIU said.

Beyond the Tarmac Fuel is one of the main operational cost items for an airline, typically accounting for 20-25% of the total. As a result of the Russia-Ukraine conflict, there has been a sharp rise in the world oil price, which returned to more than $100/barrel for the first time since 2014.The jet crack has also widened considerably this year, according to the global body of airlines – IATA.Jet crack or crack spread, is a term used in the energy markets to represent the differences between crude oil and the prices of the wholesale petroleum products that derive from it, such as jet fuel.Looking forward, the International Air Transport Association (IATA) expects oil prices to moderate somewhat over the forecast horizon, easing to around $92 a barrel in 2023, from around $102 this year.Notwithstanding the anticipated moderate price decline, the ongoing recovery in traffic volumes will result in the industry’s fuel bill increasing to around $229bn in 2023.Notwithstanding the anticipated moderate price decline the total fuel spend for 2023 is expected to be $229bn in 2023 — consistent at 30% of expenses. This is on account of greater demand for jet fuel because of the ongoing recovery in traffic volumes.IATA’s forecast is based on Brent crude at $92.3/barrel (down from an average of $103.2/barrel in 2022). Jet kerosene is expected to average $111.9/barrel (down from $138.8/barrel). This decrease reflects a relative stabilisation of fuel supply after the initial disruptions from the war in Ukraine. The premium charged for jet fuel (crack spread) remains near historical highs.Passenger demand is expected to reach 85.5% of 2019 levels over the course of 2023. Much of this expectation takes into account the uncertainties of China’s zero-Covid policies, which are constraining both domestic and international markets. Nonetheless, passenger numbers are expected to surpass the 4bn mark for the first time next year (since 2019), with 4.2bn travellers expected to fly.For airlines, the challenge of elevated fuel prices in 2023 will be the extent to which the costs can continue to be passed on to consumers or, if demand begins to wane, how to manage the still considerable cost burden given the outlook for a very modest profit margin.Overall airline costs are expected to grow by 5.3% to $776bn. That growth is expected to be 1.8 percentage points below revenue growth, thus supporting a return to profitability. Cost pressures are still there from labour, skill and capacity shortages. Infrastructure costs are also a concern.Nonetheless, non-fuel unit costs are expected to fall to 39.8 cents/available tonne kilometre (down from 41.7 cents/ATK in 2022 and nearly matching the 39.2 cents/ATK achieved in 2019). Airline efficiency gains are expected to drive passenger load factors to 81.0 %, just slightly below the 82.6% achieved in 2019.Higher energy consumption around the world also results in higher emissions.Transportation accounts for around 15% of global CO2 emissions, of which two thirds stem from road transport and one third from maritime and air transport in roughly equal parts, i.e. approximately 2.5% of global emissions each - close to the share of Germany it total emissions.While it is necessary to reduce all CO2 emissions, it is also important to be aware of the relative size of their various origins, as this can help set the policy agenda and allow for the optimisation of the pace and sequencing of reform.Today, the technology is available for scaling up the production of sustainable aviation fuel (SAF), while its current production meets less than 1% of total jet-fuel consumption, IATA noted.Rapid expansion of such production will likely require both public and private investments. Lifting the production to 10% of jet fuels could require $250bn in investments. If that sounds prohibitive, let us ponder the extent of fossil-fuel subsidies.The OECD and the International Energy Agency have analysed some 51 countries representing 85% of the world’s total energy supply and found that subsidies that kept fossil fuel prices artificially low more than tripled to $531bn in 2021, compared with 2020.Subsidies for oil and gas production reached a record level of $64bn in 2021, IATA data reveal. Hence, were those funds instead allocated to SAF production, one could reach almost 25% of current jet-fuel consumption.Or, with only the production subsidies given in a single year, SAF could be brought to 2.6% of jet-fuel consumption.Clearly, removing harmful fossil-fuel subsidies should be at the top of policymakers’ agenda.

Thousands of World Cup fans to Qatar can easily meet their forex needs as exchange houses across the country have sufficient stocks of all major currencies, sources said Tuesday.“Qatar Central Bank has ensured that no visitor from abroad faces difficulty in obtaining forex, especially major currencies such as dollar, pound and euro,” an exchange house official told Gulf Times.Since the FIFA World Cup Qatar 2022 kicked off, there has been increasing needs for foreign currency, mostly from visiting football fans, noted K N S Das, Trust Exchange general manager.“We have been able to meet their needs. We have seen greater demands for Qatari riyal and other major currencies since mid-November,” Das told Gulf Times Tuesday.An industry source said he has not heard of any major issues such as currency shortage since the commencement of the greatest sporting spectacle in Qatar on November 20.Although the purchase and sale of foreign currencies by the exchange houses moderated during 2020 with sales exceeding purchases in view of the pandemic, the situation will have improved in 2021 and this year.The decline in remittances also contributed to the moderation in salesand purchases of foreign currencies that year.But the opening of borders and resumption of air travel meant a huge demand for foreign currency, which is now felt in exchange houses across the country.A resident told Gulf Times that during the summer vacation this year he was not able to get dollar from currency traders at the airport.“But that situation has changed now. Foreign currency is now available, which is helping football fans from across the globe,” he said.Qatar is hosting the most compact edition of FIFA World Cup in modern history. All eight stadiums are within one hour’s drive of central Doha, meaning fans and players will always be in the thick of the action.This year’s tournament, which culminates on December 18 – Qatar’s National Day – is the 22nd edition of international football’s showpiece event – and the first to take place in the Middle East.

Driven by the private sector, Qatari banking sector saw overall loans increasing by 0.4% to QR1.22tn in October, QNB Financial Services (QNBFS) has said in a report.Loans have edged up by 0.2% so far in 2022, compared to a growth of 7.8% in 2021. Loans grew by an average 7.6% over the past five years (2017-2021), QNBFS said Tuesday.Deposits declined by 1.1% during October 2022 to QR954.2bn, due to a drop both in non-resident and public sector deposits.Deposits have gone down by 2% so far in 2022, compared to a growth of 7.6% in 2021. Deposits grew by an average 6.1% over the past five years (2017-2021), the report said.Qatar banking sector's total assets edged down by 0.4% MoM (up 0.1% in 2022) in October to QR1.83tn, QNBFS said.Loans to deposits ratio went up during the month to 127.8% (as at October).Total private sector loans moved up by 0.7% MoM (+4.4% in 2022) in October. The services segment and real estate were the main contributors toward the private sector loan growth for October.Services (contributes nearly 29% to private sector loans) increased by 2.2% MoM (+7.7% in 2022). The real estate segment (contributes nearly 21% to private sector loans) went up by 0.8% MoM (+6.6% in 2022).Consumption and others (contributes nearly 21% to private sector loans) gained 0.4% MoM (+4.9% in 2022), while general trade (contributes nearly 20% to private sector loans) declined by 1.2% MoM (-0.1% in 2022) during October.Outside Qatar loans went up by 1.4% MoM (-7.7% in 2022) during October.Domestic public sector loans went down slightly by 0.2% MoM (-6.7% in 2022). The government segment (represents nearly 30% of public sector loans) fell by 1.5% MoM (-24.8% in 2022).However, the government institutions segment's (represents nearly 64% of public sector loans) loan book increased by 0.4% MoM (+4.3% in 2022), while the semi-government institutions’ segment moved up marginally by 0.1% MoM (+2.3% in 2022).Non-resident deposits continued its steep decline for the year and fell by 5% MoM (-31.1% in 2022) in October, thereby leading the decliners in the overall drop in the banking sector deposits for the month, QNBFS said.Public sector deposits declined by 2.1% MoM (+10.1% in 2022) for October.Looking at segment details, the semi-government institutions’ segment had a huge drop by 19.4% MoM (+10.5% in 2022), while the government segment (represents nearly 25% of public sector deposits) declined by 7.5% MoM (-20.0% in 2022).However, the government institutions segment (represents nearly 62% of public sector deposits) increased by 5% MoM (+29.8% in 2022).Private sector deposits moved higher by 1.5% MoM (+9.4% in 2022). On the private sector front, companies and institutions’ segment gained 3.5% MoM (+18.3% in 2022).Meanwhile, the consumer segment went down by 0.4% MoM (+1.9% in 2022) during October.An analyst told Gulf Times yesterday the overall increase in loans by 0.4%, which is mainly coming from a 0.7% growth in the private sector, specifically from the services and real estate sectors, could be attributed to the sectors requirement in the build up to the FIFA World Cup Qatar 2022.“Overall decline in the deposits by 1.1% was mainly due to the 5% drop in non-resident deposits. With higher oil and gas prices and improved local liquidity situation, there is less reliance on non-resident deposits and optimisation in funding sources for banks,” the analyst noted.

Higher commodity prices are boosting Qatar’s public finances, Oxford Economics said and noted energy prices will remain high in 2023, buoying the country’s fiscal position.Pending the release of the 2023 budget, Oxford Economics forecasts a fiscal surplus of 8.8% of GDP next year and for the public debt-to-GDP ratio to subside to 41.7% in 2023, from a projected 46.3% this year.“With the debt burden shrinking, Qatar's credit rating will likely be upgraded further,” Oxford Economics said in its latest country report.In early November, S&P raised its rating for Qatar by a notch to ‘AA’ with a stable outlook, which came on the heels of Moody's positive credit outlook change.“We keep our 2022 GDP growth forecast at 5.2% and continue to see the pace of GDP growth slowing to 2.7% in 2023,” noted Maya Senussi, Oxford Economics’ senior Middle East economist.Qatar's economy is now the largest it has ever been following the 6.3% year-on-year (y-o-y) surge in output in Q2. Data show the expansion was driven by 9.7% y-o-y growth in the non-oil sectors, up from 5% in Q1, amid strength in construction, transportation, wholesale and retail trade, and real estate.Meanwhile, the oil sector expanded by 1.2% y-o-y, following an annual decline of 1.8% in Q1. Though recent industrial production data have yet to be released, Oxford Economics expects contribution from the oil sector to have remained positive.Energy prices have come under pressure as the world economy weakens.But the researcher thinks they will remain elevated, providing support to Qatar's macroeconomic environment.“The 2023 budget is being finalised, but we expect it to again be based on cautious revenue assumptions, such as the $55 a barrel oil price underpinning this year's budget. With spending somewhat rising and oil and gas prices boosting revenue, we expect a budget surplus averaging 8.8% of GDP in 2022-2023,” Oxford Economics noted.Qatar’s figures for H1, 2022 show the widest budget surplus since 2014. The budget was in surplus in 2021, reversing a deficit of 2.1% of GDP in 2020, the lowest in the GCC, Oxford Economics said.The riyal's peg to the dollar implies Qatar's central bank will track the higher rate path in the US, where the researcher expects the Federal Reserve to continue tightening into next year.The monetary authority has matched the Fed's moves since March, most recently raising the repo rate by 75 bps to 4.75% in November. While the hikes have had a very limited impact on growth so far due to supportive energy and fiscal trends, borrowing costs will likely have risen by 425 bps in a year, weighing on non-oil growth in 2023, Oxford Economics noted.Qatari banks have been resilient and are well capitalised and profitable, with low levels of non- performing loans.However, their reliance on foreign funding has risen, and Fitch downgraded some bank ratings earlier this year, it noted.

The GCC looks likely to remain an “outperformer in the global context” next year, Emirates NBD said although it expects the region’s average GDP growth to slow to 3.5% in 2023.The GCC countries have enjoyed a strong performance in 2022 on several fronts. The outlook for the GCC in 2023 also remains constructive.Emirates NBD expects economic growth in the region to come in at around 7% on a nominal GDP-weighted basis, the fastest in over a decade. This has largely been driven by double-digit growth in oil production across the region as the pandemic-related production cuts were fully unwound.“However the non-oil sectors have performed well too and we expect average non-oil GDP to reach 4.4% this year, similar to the growth rate achieved across the GCC in 2021, even as global growth has slowed this year,” noted Khatija Haque, head of research and chief economist at Emirates NBD.Domestic demand has continued to rebound from the pandemic and the recovery in global travel and tourism has also supported the non-oil sectors, particularly in the UAE.Expo 2020 contributed to strong growth in the UAE’s tourism and hospitality sectors in Q1, 2022, and the reopening of long-haul markets has seen visitor numbers rebound sharply from last year, although they remain around 15% below 2019 levels through September.The FIFA World Cup is expected to support demand in Qatar in Q4, 2022 even as the global economy has started to slow.The GCC budget performance has also improved significantly this year on the back of higher oil production and prices, as well as the broader economic recovery in the region, Emirates NBD noted.\"We estimate the average GCC budget surplus will reach almost 8% of GDP this year following seven years of deficits. While government spending has increased slightly this year, governments have so far been relatively prudent with their oil windfall, using budget surpluses to build up reserves, pay down debt and invest for the future, \" it said.The GCC countries have also provided financial support to other Mena countries that have faced current account shocks this year on the back of rising energy and food prices.“The outlook for the GCC in 2023 remains constructive,” it said.\"GDP growth will slow sharply as the 16% increase in oil and gas GDP that we saw this year is unlikely to be repeated, and further production cuts from Opec+ pose a downside risk to growth in this sector in 2023. Non-oil GDP is also expected to slow somewhat next year but is likely to remain relatively robust as governments continue to invest in strategic sectors and projects to diversify their economies.“Our baseline forecast is for oil prices to remain above $100/b next year, which will allow governments to maintain spending even as private investment slows,” Haque noted.There are headwinds to growth in the coming months, however. The tightening in monetary policy that we’ve seen in 2022 will continue to weigh on global economic growth in 2023 as central banks focus on bringing inflation down.Even with oil prices expected to remain relatively high, the region is not immune from slowing global growth, particularly given its position as a global trade and logistics hub.“Higher borrowing costs may deter private sector investment in the region and a strong dollar will also erode competitiveness, making the region a more expensive destination for both foreign investors and tourists,” Emirates NBD said.

Duty free sales at select GCC airports including Doha and Dubai are expected to grow by 65.5% y-o-y to reach $2.2bn in 2022, Alpen Capital has said in a report.By 2026, duty free sales in Qatar, UAE and Bahrain are further projected to reach $3bn, implying an annualised growth of 8.4% since 2022, Alpen Capital said in its report on ‘GCC retail industry’.It said the GCC nations have laid out strategic plans to promote the tourism sector as part of their long-term objective to diversify away from oil. This has led to investments in the development of tourism infrastructure, which includes expanding the airport capacity to complement the governments’ commitment towards the tourism sector. At the same time, the governments have been easing visa regulations to boost the number of tourist arrivals.Duty free operators are the biggest beneficiaries of the expansion of the tourism industry, as the resultant rise in passenger traffic potentially leads to increase in sales.Prior to the pandemic, international tourist arrivals in the GCC increased at an annualised growth rate of 2.8% between 2016 and 2019 primarily driven by the UAE (6.6% CAGR) and Kuwait (6.7% CAGR).Majority of the demand was generated by personal, leisure and religious travel followed by business and professional travel during the period. With 35.7% inbound tourist arrivals in 2019, the UAE led the GCC countries in terms of share of international tourist arrivals, followed by Saudi Arabia (28.6%), and Bahrain (15.6%).As a result of the Covid-19 led restrictions, GCC international tourist arrivals declined by 75% y-o-y in 2020. However, swift response to curb the virus through stringent policies and widespread vaccine deployment led to the crisis reach an endemic state. Consequently, tourist arrivals in the region witnessed widespread recovery in 2021, posting a 56.1% y-o-y growth compared to the end of 2020 to reach 27.7mn.At the same time, passenger traffic at international airports in Doha, Dubai, Abu Dhabi, and Bahrain have also grown since 2020.These factors have revived the region’s airport retail market, which was significantly hit during the pandemic.Between 2016 and 2019, duty free sales at Doha, Dubai and Bahrain airports grew at a CAGR of 3.3% and cumulatively accounted for 44.1% of the Middle East’s total sales.In 2020, duty free sales at these airports declined by 58.3% y-o-y and witnessed a revival of 11.5% y-o-y in 2021 to reach an estimated $1.3bn by the year-end.Share of the GCC duty free sales of the total Mena region during 2021 improved to an estimated 46.9% from 44.1% in 2016.Key Qatar Duty Free retail openings in 2021 included several luxury avenues, stand-alone airport boutiques, cafes and high-end brand stores among others130.In 2021, the Hamad International Airport was recognised as the ‘Best airport in the world’ by the Skytrax World Airport Awards, while also being named the ‘Best Airport in the Middle East’ and ‘Best Airport with 25 to 35mn passengers’.The airport was also recognised with awards for ‘Best airport staff’ in the Middle East and ‘Covid-19 airport excellence’ during the year, Alpen Capital noted.

Beyond the Tarmac The Covid crisis has had a massive impact on India's civil aviation sector with air traffic falling to all-time low last year.On Tuesday, India just recorded 215 new coronavirus infections and one Covid-related death within a 24-hour period, the lowest since April 2020, according to the country’s Ministry of Health.In the first quarter of 2021, at the height of the pandemic, India recorded the highest one-day tally of new Covid-19 cases anywhere in the world- exceeding 400,000 cases.Since then, in a nation-wide free inoculation drive, millions of Indians had been administered Covid vaccination, which helped bring down the daily caseload.But the recovery in India’s civil aviation market was hampered and got delayed because of the Ukraine war, which is the case in most major global markets.Due to a temporary halt in all airline operations at the peak of the pandemic and the subsequent rise in aviation turbine fuel (ATF) pricing, the finances of Indian airline companies have been in disarray.Experts say Indian airlines’ losses mounted to the tune of $2.5bn in last financial year and may hover around $1.7bn in the current fiscal, despite the opening up of the economy.Despite being loss-making, the Indian aviation industry continues to garner investors’ interest, attracting investments mainly from the private sector.India is the world’s third-largest air passenger market, after China and the United States.According to the India’s Director General of Civil Aviation (DGCA), in FY22, country’s passenger traffic stood at nearly 189mn, out of which domestic passenger traffic accounted for over 166mn, a 58% year-on-year (y-o-y) rise from 105mn in FY 21.On the other hand, international passenger traffic saw a 118% y-o-y rise to 22mn from 10mn in FY21. The Indian aviation sector is expected to touch 400mn passengers annually in seven-10 years.Despite the pandemic, domestic airlines have continued to add new aircraft to their fleets. Indian civil aviation ministry estimates the overall fleet size to almost double to 1,200 in five years from the current size of over 700 planes.In this context, the Tuesday’s announcement of Vistara airlines’ merger with Tata-owned Air India by March 2024 assumes significance.Singapore Airlines, which owns minority share in Vistara in its joint venture with Tata, will own around 25% of the enlarged Air India, into which it will infuse over ₹20bn.The rearrangement will mean a larger fleet and more routes under the Air India brand as Tata Sons rebuilds a mega aviation wing of its empire. At present, 51% share in Vistara is with Tata, while Singapore Airlines owns the remaining 49% in the joint venture set up in 2013.India’s aviation market may be moving towards a duopoly following the merger of two full-service carriers Air India and Vistara, noted consultancy and research firm CAPA India.The merger, it said, would strengthen the sector.“The competitive dynamics in India are moving towards a two-pillar system around the Air India Group and IndiGo. The two carriers combined are in due course expected to achieve a domestic market share of 75-80%,” CAPA India said.“This will redraw market and consumer power in the international arena back to Indian carriers, which has historically been dominated by foreign airlines”.India needs a high quality, dependable long-haul and ultra-long-haul airline to meet the country’s air connectivity requirements. The combined entity is in line with India’s aspirations to be a $5tn economy shortly, CAPA stated.Stating that there has been continuous improvement on the policy front, but if further reforms can be fast tracked, this will provide a powerful impetus to India's aviation system, CAPA said and emphasised that the confluence of world class entities on the corporate front, accompanied by fiscal (both direct and indirect taxes) and regulatory reforms, will enable India's true aviation potential to be realised in the medium to long term.An earlier Airbus’ forecast showed India will require 2,210 new aircraft over the next 20 years. That fleet could comprise 1,770 new small and 440 medium and large aircraft.Over the next decade, India will grow to have the largest population in the world, its economy will grow the fastest among the G20 nations, and a burgeoning middle class will spend more on air travel.As a result, Airbus noted passenger traffic in India will grow at 6.2% per year by 2040, the fastest among the major economies and well above the global average of 3.9%.Prominent Indian aviation analyst Ashwini Phadnis said “the merger of Air India and Vistara is on expected lines.”“This development augurs well for the Indian aviation market as AI and IndiGo will now be the two players with the largest market share within India. The merger along with IndiGo’s fleet induction plan should also help India claw back some of the international traffic from international carriers, which are presently carrying over 60% of outbound traffic from India,” Phadnis told Gulf Times.The merger of Vistara and AI will benefit both the airlines, he said. India is set to become the third largest global aviation market. Indian domestic passenger traffic hit pre-Covid levels of around 400,000 a day for a few days in November but has been around the 350,000 mark.A recent Nangia Andersen and FICCI study estimates that the out bound travel market from India will surpass $42bn by 2024.Given the financial position of the India aviation market with CAPA India revising upwards its loss estimates for Indian airlines to $2.5bn from $1.4-1.7bn earlier, excluding accounting adjustments and major impairment costs consolidation and mergers might be one way forward for the Indian aviation industry, he said.However, Phadnis noted it remains to be seen whether given the precarious balance sheet of most Indian carriers any carrier or investor will be ready to pump in funds right now.

Qatar is continuing to talk to German buyers about additional LNG supplies; HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi said and noted “many European and Asian countries now want natural gas that we do not have enough negotiators to cope.”Germany is set to receive new flows of Qatari liquefied natural gas (LNG) from 2026 after QatarEnergy and ConocoPhillips Tuesday signed two sales and purchase agreements for its export covering at least a 15-year period.A ConocoPhillips subsidiary will purchase the agreed quantities to be delivered to the German receiving terminal at Brunsbuttel in the northern part of the country, which is currently under development.“We are discussing other possible deals for Germany and with many Asian and European countries. We are negotiating with German companies to further increase the volumes being sent,” al-Kaabi said in reply to a question by Gulf Times Tuesday."We are committed to contribute to the energy security of Germany and Europe at large," al-Kaabi said.Lance hailed the accord as "a vital contribution to world energy security".“QatarEnergy and ConocoPhillips are excited for the opportunity to responsibly and securely supply world markets with LNG from the Qatari expansion projects.”“These agreements will provide an attractive LNG offtake solution for our new joint ventures with QatarEnergy and position the joint ventures as reliable sources of LNG supply into Europe,” Lance added.According to a Bloomberg dispatch, the five (LNG) import facilities chartered by the German government will cost a total of €6.5bn over the next 10 to 15 years. There is also one privately chartered terminal planned. Once operational, they will be able to cover around one third of Germany’s current gas demand, according to a government estimate.Last week, QatarEnergy entered into a 27-year sale and purchase Agreement (SPA) with China Petroleum & Chemical Corporation (Sinopec) for the supply of 4mn tons per year (MTPY) of LNG to China.Under the terms of the SPA, the contracted LNG volumes will be supplied from QatarEnergy’s North Field East (NFE) LNG expansion project and will be delivered to Sinopec's receiving terminals in China.QatarEnergy earlier this year signed five deals for North Field East (NFE), the first and larger of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar's liquefaction capacity to 126mn tonnes per year by 2027 from the current 77mn in two phases.

Qatar will take part in the "exclusive" Ministerial Panel featuring energy ministers from across the GCC at the 16th Annual GPCA Forum in Riyadh in December, according to the Gulf Petrochemicals and Chemicals Association.HE the Minister of Energy Affairs Saad bin Sherida al-Kaabi will be on the panel that will address the topic “Balancing net-zero ambitions in the energy sector with growth – a policymaker’s balancing act”.The other panelists are Prince Abdulaziz bin Salman al-Saud, Minister of Energy, Saudi Arabia and Dr Mohamed Bin Mubarak Bin Daina, Minister of Oil & Environment, Special Envoy for Climate Affairs, BahrainAccording to GPCA research, GCC chemical revenue in 2021 soared by 77.2%, the highest level recorded since 2013 due to post-Covid recovery that led to increasing demand and high chemical prices globally. Quantifying, the chemical revenue grew to $96bn last year from $54.1bn in 2020.On the back of higher chemicals prices, GCC chemical trade balance revenue almost doubled between 2020 and 2021 from $27bn to $53bn, with trade balance volume also growing by 30%, reaching 56.5mn million tons.While the industry remained buoyant over the last 18 months, it is currently off track to achieve its ambitious net-zero targets by 2050. According to the International Energy Agency, globally direct CO2 emissions from primary chemical production amounted to 925tons in 2021, a 5% increase with respect to the previous year.This is due to a production increase to levels above those in 2019. In the GCC, average CO2 intensity increased by 3% in 2021 as emissions rebounded since the Covid-related lockdowns in 2020. Nonetheless, CO2 intensity has remained on a declining trend since 2013.GPCA Secretary General Dr. Abdulwahab al-Sadoun commented, “If the industry is to achieve its net- zero ambitions by 2050, it would need to focus on growing its utilisation of renewables, improving its energy efficiency, reducing its emissions, and capitalising on new markets for carbon and other by-products as part of the circular economy.“Regional producers alongside their regional and global value chain partners are taking concerted steps, committing new investments and accelerating their research and innovation efforts in line with their decarbonisation efforts. Both the public and private sector have a crucial role to play on the road to net-zero.“GPCA is, therefore, pleased to host some of the region’s most prominent policymakers for an exclusive ministerial panel where forum delegates will have an opportunity to hear first-hand about our regional governments’ plans and initiatives enabling the transition.”

Buoyed by the World Cup, Qatar is expected to record the "highest growth" in retail sales in the Gulf Co-operation Council (GCC) region, with an estimated 36% y-o-y to reach $18.5bn in 2022, Alpen Capital said in a report.This can be primarily attributed to an estimated 145.5% y-o-y growth in tourist arrivals as the country hosts the FIFA World Cup Qatar 2022, one of the biggest sporting events globally.More than 1mn visitors are expected to visit the country during the event, which is likely to significantly boost the revenues for the retail industry and add approximately $17bn to the nation’s economy.However, growth is expected to normalise post the completion of the FIFA World Cup with retail sales reaching $21.2bn in 2026, equating to an annualised growth rate of 3.5% since 2022.Although Qatar is a relatively smaller market compared to the UAE and Saudi Arabia, it is likely to benefit from the long-list of global sporting events lined up to take place in the country during the forecasted period, Alpen Capital noted.The rise in number of football fans from across the globe will help increase retail sales not only in Qatar but also the neighbouring GCC nations. Qatar Duty Free has been named as the Official Retail Store for the global footballing event.This includes a licence to exclusively sell all FIFA World Cup 2022 merchandise and collectables in the fan zones and at all stadiums hosting the matches in Qatar.Fans will also be able to purchase tournament memorabilia at Hamad International Airport, the Official Airport of the FIFA World Cup 2022, and at numerous outlets in malls across the country. In addition to hosting the FIFA World Cup 2022, the country has bid to hold several other international sporting events, festivals and tourism related activities in the coming years.Some of the major international sporting events lined up to take place in the country include the Formula 1, International Golf Championship, World Championship of Motorcycles, 2024 World Aquatics Championships, and 2030 Asian Games, among others.“These will help drive retail sales across the region,” Alpen Capital noted.