Mubasher: The National Bank of Kuwait (NBK) expected an economic growth in Qatar by 3.5% to $169.4 billion, backed by the commencing of operations at the Barzan field, which will add 20% to the country’s total gas production.
Qatar’s gross domestic production (GDP) will decline 2% reaching $176.3 billion in 2018, according to the bank’s most recent report.
The Barzan field will increase oil production by 4% during 2018, NBK said, but stated this output will decline 1% by 2019.
Non-oil growth, which will remain under pressure as the GCC diplomatic rift disrupts investment, trade, and the business climate, will decline 3% during 2018 and 2019, according to data.
Budget deficit
The financial sector stabilised on the back of an increase in the public sector’s deposits by the governments. Qatar’s budget deficit is set to drop to represent 3% of GDP, the report stated.
Meanwhile, spending is set to rise, NBK said, indicating that the government allocated QAR 203.2 billion for spending to compensate for the decline in spending over the past two years.
The budget deficit will slide for the second year in a row to 2% of GDP, which is expected to reach $176.3 billion.
Inflation
In August and September 2017, Qatar’s inflation hit its lowest level since 2011 for the first time.
The key to weak price pressures has been the slump in the housing component, which went down 5.4% year-on-year in October, the bank reported.
Applying the value-added tax (VAT) in the second half of 2018 will add about 2% to Qatar’s inflation rate, in addition to food prices growth, which will reach 2.5% in the coming two years, NBK concluded.
