Mubasher: Qatar is expected to successfully continue adjusting to lower oil prices amid getting rid of the negative economic and financial impacts of the diplomatic rift between Qatar and some Arab countries, according to the preliminary findings of IMF staff at the end of an official staff visit.
Gross domestic product (GDP) of the world’s biggest liquefied natural gas (LNG) exporter is forecast to grow 2.6% during 2018, according to IMF’s financial outlook.
Implementing investment programmes would help support the economic growth of the wealthy nation, as the continuation of its diplomatic crisis with four Arab countries may weigh on investor confidence.
During 2019 and 2023, Qatar’s economic growth is projected to rise 2.7%, encouraged by the authorities’ intention to increase LNG production capacity by around 30% per annum, the report showed.
“The authorities plan to use possible future fiscal surpluses in light of the evolution of oil prices to build up the reserves of QCB and increase asset holding of QIA,” according to the IMF’s statement released on Monday.
While inflation may reach its peak at 3.8% this year on the back of the country’s plan to introduce the value-added tax (VAT) by the second half of the current year, analysts forecast.
Meanwhile, inflation would fall to 2.2% on the medium term after easing the VAT impact, they added.
Fiscal and external balances are predicted to improve in the short- and medium-term due to continuing expenditure control, in addition to higher hydrocarbon prices than the rates in the period between 2014 and 2016, the report said.
Qatar ranked the 25th out of 137 in the world Economic Forum’s Global Competitiveness Index 2017-2018, but it topped the list of most emerging markets that reflected its stronger infrastructure base.
