By Andy Sambidge
IMF director says growth set to remain stable over the medium term, driven by public investments
Qatar is likely to see GDP growth of about six percent this year, with similar growth expected over the medium term driven by public investments, according to a new report by the International Monetary Fund (IMF)
Its executive board said inflation in the Gulf state is projected to stay benign at 3-4 percent going forward, partly due to an anticipated decline in commodity prices, including for food, and the fixed exchange rate.
Potential challenges, it added, include the risk of the economy over-heating in the near term and over-capacity in the medium term as a result of the public investment programme.
The IMF said the possibility of a sharp decline in oil and gas prices remained the main medium-term risk but added that authorities have ample fiscal and external buffers to deal with contingencies.
As the world’s largest exporter of liquefied natural gas (LNG), Qatar has turned into an important global financial investor, labour importer, and donor.
Growth averaged 14 percent over the past decade with per capita GDP reaching $100,000, the highest in the world.
Authorities have since embarked on a large public investment program to advance economic diversification and prepare for the FIFA 2022 World Cup
IMF executive directors welcomed Qatar’s continued strong macroeconomic performance, underpinned by solid non-hydrocarbon growth and stable prices. They agreed that continued prudent macroeconomic management and efforts to diversify the economy will help ensure long-term growth and stability.
Directors also commended Qatar for pursuing ambitious fiscal reforms, such as the commitment to limit spending over-runs, a medium-term focus in the budget process, performance budgeting, and setting up of the macro-fiscal unit.
The IMF also said that priority should be given to further improving the business environment and the quality of education.