Mubasher: Qatar’s gross domestic product (GDP) growth is expected to advance 3.5% in 2018 from 1.2% in 2017, encouraged by the startup of Barzan gas field, which will add 4% to oil sector GDP, National Bank of Kuwait (NBK) said in recent report on Sunday.
GDP growth rate of the world’s biggest exporter of liquefied natural gas (LNG) will decline to 3.5% in 2018 from 4% in 2017 on the back of the continued blockade, which shows few signs of resolution, the bank’s report added.
In June 2016, four Arab countries led by Saudi Arabia cut diplomatic and transport ties with Doha for political reasons.
In spite of the Arab boycott, Qatar’s imports returned to close to pre-crisis levels, in addition to establishing new trade routes and more stable capital flows.
Qatar’s economy improved, but it is still under pressure, which is reflected on corporates’ earnings, as equity and real estate prices have dropped, the report showed
As a result, more difficult funding climate has placed strain on banks and the currency peg, according to the report.
The flow of people and tourists into the world's richest country per capita has also been significantly affected, as the resident population was up 3% year-to-date in November 2017, compared to 7-11% in the equivalent period in the previous five years.
Year-on-year, population growth decreased to just 1.7%, the slowest since 2011, however it has been declining over the past few years.
Moreover, NBK’s report added that oil and gas revenues, the Qatari government key source of receipts, have been unaffected by the diplomatic rift, including gas revenues delivered to the UAE through Dolphin pipeline.
By the end of 2018, Qatar’s government planned to impose the value-added tax (VAT), which will add 2% to the annual inflation rate for one year.
The introduction of VAT came amid the absence of the nation's preparations concerning boosting the national economy and narrowing the fiscal deficit, so the implementation could be delayed, according to the report.
