Qatar economy to keep up bullish momentum: QNB

Oil prices are expected make gradual recovery in the coming years and Qatar’s economy is expected to keep up its bullish momentum powered by non-hydrocarbons, whose share in the economy is expected to go up to about 69% by 2017, according to QNB.  Oil prices, which were hovering around $100 a barrel in 2014, is expected to fall to $56 this year, after which it is poised to reach $64 in 2016 and $69 by 2017, QNB CEO Ali Ahmed al-Kuwari told the MEED conference.He said oil prices fell due to weakening global demand and rising global supply (mainly the US shale oil).Despite the current low oil prices, QNB expects economy to grow faster due to the ongoing investment programme with real GDP growth expected at 7% (6.7% in non-oil and 0.3% in hydrocarbons) this year, after which it is slated to grow at 7.5% (6.9% and 0.6%) by 2016 and to 7.9% (7.2% and 0.7%) by 2017.He asserted that the project spend would continue despite the current trough in crude, which is expected to make recovery once the excess supplies in the world market subsides.“Qatar has ample external and fiscal buffers to withstand the temporary drop in oil prices,” he said, adding therefore, the investment programme is unlikely to be impacted by lower oil prices.The public investment led diversification strategy is to further propel Qatar, which has the highest per capita hydrocarbon GDP and reserves.To drive this diversification, government has embarked upon a mammoth public investment spending, which is slated to grow at a compound annual growth of 5.8% during 2014-17 to total more than QR260bn in four years.“This diversification drive is expected to raise the share of non-hydrocarbons to 68.5% of GDP by 2017”, up from 39.6% during 2000 to 42% by 2005 and 47.4% in 2010, he said, adding the investment programme is focused on the construction and transport sectors through a multitude of projects. Construction sector is expected to corner about 49% of the project spend for 2014-18, followed by transport (29%), utilities (11%), oil and gas (9%), petrochemicals and industrials (1% each).The continued economic growth and high investment in Qatar should augur well for the banking sector, he said, adding total assets are expected to grow 11%, deposits by 12% and loans by 10% during 2014-17.