Early vaccine rollout and rise in demand and prices of petroleum products are expected to favour Qatar’s economy and help it maintain growth trajectory this year.
Qatar’s economy, supported by the National Vaccination Programme and the increase in oil demand and prices, is expected to recover from the effects of the Covid-19 pandemic in 2021 with real GDP growth of 2.2%, Ministry of Finance said in a recent report.
According to Ministry of Finance, Qatar’s economy contracted in 2020 as the recorded real GDP was -3.7%. The contraction was primarily driven by the Covid-19 pandemic outbreak and weak oil demand during 2020.
Ministry of Finance data showed that expenditure on major projects in the country during the first quarter (Q1) of this year totalled about QR15bn, or 20.8% of the 2021 budget.
In addition, newly awarded projects during the first quarter of 2021 amounted to about QR4.6bn, a report issued by the Ministry said.
The total public debt remained constant, maintaining the same level and split as of 2020 year-end at QR381.9bn. There was neither new public debt during the quarter, it said.
The total revenue for Q1, 2021 amounted to QR45.2bn driven by the recovery in oil prices. On the other hand, expenditure totalling QR45bn has been recorded.
As a result, the budget balance recorded a minor surplus of QR0.2bn.
On presentation, the 2021 state budget had estimated revenue of QR160.1bn and expenditure of QR194.7bn, leaving a deficit of QR34.6bn.
The 2021 revenue was estimated to be down 24.1% compared with 2020 budget, which was based on a $55 price.
The allocation for major projects was set at QR72.1bn, which includes those for new projects along with ongoing development
works in various sectors and those related to hosting the 2022 World Cup.
On the sectoral allocation, the 2021 budget had earmarked QR42.2bn for the defence and security sector, which captures the largest share of 22% due to various projects, contracts, commitments and initiatives.
The International Monetary Fund (IMF) also maintains the view that in addition to the recovery in the non-oil sector, the oil sector with the development of new oil and gas fields will also contribute to the improvement in economic outcome for 2021 and also for the medium term.
IMF’s director (Middle East and Central Asia Department) Jihad Azour said at a recent media event that “Qatari Government took certain number of important measures to extend additional social support, increase the fiscal stimulus as well as also an important package of support to the private sector through the banks. These include additional liquidity and additional financial schemes that had cushioned the impact of the shock on the economy.”
Besides vaccine rollout, the improvement in the relationship between GCC countries following the Al-Ula Accord will help Qatar’s economy recover, Azour noted.
“These will create better conditions, help increase the
level of exchange of goods, services and also people, and provide an additional source of visitors – both for tourism as well as for the 2022 FIFA World Cup from the region,” Azour told Gulf Times.
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