Qatar’s hydrocarbon sector is expected to accelerate on the back of higher gas production and a recovery in oil prices, FocusEconomics has said in a report.
But in its recent forecast, FocusEconomics said growth in the Qatari economy would continue to be supported by the non-oil sector, with the government earmarking almost half the budget for infrastructure project developments.
FocusEconomics “Consensus Forecast panellists” see Qatari economy growing by 3.4% this year. And for 2018, the panel foresees a growth of 3.6%.
According to FocusEconomics, Qatar’s economy “continues to fare well despite the woes” that beset the hydrocarbon sector, with GDP growth in the third quarter (Q3) at 3.6%, up from 1.8% in Q2.
“The country is expected to trim oil output by 4.5% in January in a bid to stabilise the crude market, following the Opec agreement reached in November,” FocusEconomics said.
However, Qatar’s recently approved budget for 2017 assumes oil prices will average $45 per barrel, which would be an abnormally low figure if Opec’s attempt to boost prices proves successful, the report said.
Qatar’s fiscal year now begins in January and ends in December.
Sustaining spending in key sectors such as health, education, infrastructure and transport, Qatar’s budget for 2017 has earmarked QR93.2bn for major projects.
The budget estimates revenues of QR170.1bn and an expenditure of QR198.4bn, thus expecting to post a deficit of QR28.3bn.
The shortfall is expected to be covered by issuing debt instruments in the local and international financial markets, while maintaining its reserves and investments.
The projected deficit in the 2017 budget was due to “a combination of low energy prices and a period of high development expenditure,” HE the Minister of Finance Ali Sherif al-Emadi had said earlier. The deficit (budgeted at QR28.3bn) was down by 39.1% compared with QR46.5bn in the 2016 budget.
“Under the budget, the government will run a smaller deficit compared to last year and, while it contemplates austerity measures, these will be focused on public current spending only,” FocusEconomics said.
Earlier the International Monetary Fund (IMF) in a report expected Qatar to achieve an overall GDP growth rate of 3.4% in 2017, the highest in the GCC region. And according to the IMF, the implementation of major development projects would have a “positive impact” on Qatar’s economic growth.
Also, the implementation of development projects will help sustain development in non-oil sectors, which achieved a “strong” growth rate of 5.8% during the first six months of 2016.
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