* According to Lloyds Bank, IMF anticipates a debt reduction this year and the next, with levels at 60.6% of GDP in 2021 and 54% in 2022
Qatar's economy is expected to bounce back to 2.5% in 2021 and 3.9% in 2022, subject to post-pandemic global economic recovery and expected boom in the services sector ahead of the FIFA 2022 World Cup, Lloyds Bank has said in an update.
In a recent update on its international trade portal, Lloyds Bank said Qatar’s general government debt has grown from 56.2% of GDP in 2019 to 68.9% in 2020 as the country continued to borrow on international markets.
The International Monetary Fund anticipates a debt reduction this year and the next, with levels at 60.6% of GDP in 2021 and 54% in 2022. Current account surplus narrowed to 2.4% of GDP in 2019 from 9.1% a year earlier as global energy prices fell.
However, the IMF expects this trend to be strengthened by the negative economic impact of the Covid-19 pandemic and the fall in oil prices. The current account balance was negative in 2020 (-0.6% of GDP) and is expected to bounce back to 2.6% in 2021 and 3.4% in 2022.
Lloyds Bank noted the commissioning of Barzan natural gas facility (in 2019) could, however, support domestic gas production and contribute positively to growth.
In the medium term, the expansion of North Field gas projects is expected to be completed by 2024, further boosting gas output.
Qatar, it said has been implementing an economic diversification programme to lower its dependency on the hydrocarbon sector, and in December 2018 the country announced it would leave the Organization of the Petroleum Exporting Countries (Opec) in January 2019 to focus its efforts on natural gas expansion.
New projects are planned in infrastructure and telecommunications, and various construction projects are in progress in preparation for the World Cup in 2022. Inflation was estimated to have fallen to -0.6% in 2019 and -2, Lloyds Bank said.
“In 2021, the country’s most immediate challenge is related to the economic, social and public health impacts of the Covid-19 pandemic,” Lloyds Bank said.
Like other Gulf countries, Qatar has been hit by the global decline in oil prices since 2014. However, the economic results have been better than those of its neighbours, due to successful economic diversification, namely via the development of large-scale projects, Lloyds Bank noted.