Top officials also say gov't will keep inflation in check by streamlining large construction projects
Qatar's gas and oil will have less impact on the economic growth in the near future, and the government will keep inflation in check by streamlining large construction projects, top officials said on Tuesday.
Qatar's economy had averaged 16 percent annual growth in 2006-2011 as the tiny Gulf Arab country boosted its liquefied natural gas exports. It slowed to 6.2 percent last year as gas expansion levelled off, close to a government forecast of 6.2 percent. The forecast for this year was 4.8 percent.
"We expect the oil and gas sector to have a limited growth impact on the country's GDP (gross domestic product) in the foreseeable future," Prime Minister Sheikh Abdullah bin Nasser al-Thani told a financial conference in the Qatari capital.
The government imposed a moratorium in 2005 on all new gas export projects from the massive North Field and indicated in late 2010 that it does not plan to lift the moratorium in 2014, when it had originally been expected to be reviewed.
The International Monetary Fund forecast in November Qatar's oil GDP, adjusted for inflation, would grow just 0.4 percent in 2013 and decline by 1.1 percent next year after a 1.7 percent rise in 2012. It expects the overall economic growth to slow to 5.1 percent this year and 5.0 percent in 2014.
The oil and gas sector accounted for 58 percent of Qatar's economy and 59 percent of exports in 2012. Hydrocarbon receipts represent some 70 percent of the government budget income.
Qatar plans to spend about $140 billion on infrastructure projects before it hosts the 2022 World Cup soccer tournament, including a new airport, stadiums, roads and rail.
Finance Minister Ali Sherif al-Emadi told the same event that the policymakers planned to avoid pressure on prices and public services that could come from the construction activity.
"The process of developing financial policy will focus on supporting these projects in the means of setting priorities," he said in his first remarks since being appointed in June. "And utilizing resources effectively, establishing a balance between costs and production, coordination between projects to avoid pressure on public services and to control inflation."
Qatar's fiscal spending has risen an average 26 percent annually in the past decade as the country expanded gas producing facilities and infrastructure. But its ability to fight inflationary pressure with monetary policy is constrained by the riyal currency's peg to the US dollar.
The IMF's projections show inflation should roughly double to 3.7 percent on average this year and 4.0 percent in 2014 from 1.9 percent in the previous two years. That is still well below the record 15 percent in 2008.
Emadi's comments echoed November remarks of Sheikh Tamim bin Hamad al-Thani, who became emir in June when his father handed over power. He said the country will use all available tools to contain inflation while cracking down on corruption and business monopolies.