Qatar’s expected economic rebound this year will be driven by the relatively higher energy prices on account of economic recovery in Asia, particularly in China, global trade credit insurance firm Coface said in a recent update.
The local economy contracted last year mostly due to the sharp reduction in the non-oil sector and the decline in energy prices, but Coface expects Qatari economy to record a rebound through 2021.
This recovery will be driven by the relative increase in energy prices led by the economic recovery in Asia (80% of exports in H1, 2020), particularly in China, which attracted 13% of total exports.
Qatar’s net liquefied natural gas exports are estimated to increase and rising demand from Pakistan and Bangladesh should support this increase in LNG supply, Coface noted.
Qatar recently signed liquefied natural gas supply deals with Bangladesh and Pakistan.
Last month, Qatar Petroleum entered into a new long-term sale and purchase agreement (SPA) with Pakistan State Oil Company (PSO) for the supply of up to 3mtpy of LNG to Pakistan.
Again in February, QP entered into an SPA with Vitol for the supply of 1.25mtpy of liquefied natural gas (LNG) to Vitol’s final customers in Bangladesh.
Growth will be also be backed by government spending in infrastructure projects ahead of the FIFA World Cup Qatar 2022.However, almost 90% of the big-ticket projects are now close to completion.
Coface cited International Monetary Fund (IMF) and said Qatar benefits from “one of the lowest fiscal breakeven oil prices” across the GCC region.
The impact of lower energy prices and exports has been partially compensated by spending cuts from the government last year. Nearly half of fiscal revenues come from the hydrocarbon sector, so the relative recovery of energy prices in 2021, in the absence of a second wave of Covid-19, should support the budget.
The current account balance would have recorded a small deficit in 2020, before returning into positive territory in 2021.
“The recovery in energy prices, coupled with a pick-up in demand, will support exports. The expansion of gas production from the North and Barzan fields will also increase exports.
“Qatar’s assets in its sovereign wealth fund and its international reserves will ensure the peg with the dollar and provide a large space for the government to support economic activity,” Coface said.
Qatar Central Bank has fixed the value of the Qatari Riyal (QR) against the US dollar (USD) at a rate of QR3.64 per USD.
This recovery will be driven by the relative increase in energy prices led by the economic recovery in Asia (80% of exports in H1, 2020), particularly in China, which attracted 13% of total exports.
Qatar’s net liquefied natural gas exports are estimated to increase and rising demand from Pakistan and Bangladesh should support this increase in LNG supply, Coface noted.
Qatar recently signed liquefied natural gas supply deals with Bangladesh and Pakistan.
Last month, Qatar Petroleum entered into a new long-term sale and purchase agreement (SPA) with Pakistan State Oil Company (PSO) for the supply of up to 3mtpy of LNG to Pakistan.
Again in February, QP entered into an SPA with Vitol for the supply of 1.25mtpy of liquefied natural gas (LNG) to Vitol’s final customers in Bangladesh.
Growth will be also be backed by government spending in infrastructure projects ahead of the FIFA World Cup Qatar 2022.However, almost 90% of the big-ticket projects are now close to completion.
Coface cited International Monetary Fund (IMF) and said Qatar benefits from “one of the lowest fiscal breakeven oil prices” across the GCC region.
The impact of lower energy prices and exports has been partially compensated by spending cuts from the government last year. Nearly half of fiscal revenues come from the hydrocarbon sector, so the relative recovery of energy prices in 2021, in the absence of a second wave of Covid-19, should support the budget.
The current account balance would have recorded a small deficit in 2020, before returning into positive territory in 2021.
“The recovery in energy prices, coupled with a pick-up in demand, will support exports. The expansion of gas production from the North and Barzan fields will also increase exports.
“Qatar’s assets in its sovereign wealth fund and its international reserves will ensure the peg with the dollar and provide a large space for the government to support economic activity,” Coface said.
Qatar Central Bank has fixed the value of the Qatari Riyal (QR) against the US dollar (USD) at a rate of QR3.64 per USD.