Qatar – Mubasher: Capital Economics said in a report issued Wednesday that latest data show that Qatar’s economy has continued to grow at a robust pace.
“Admittedly, oil production is still contracting in year-on-year terms. But activity in the non-oil sector seems to have strengthened. Consumer confidence has risen steadily, pointing to strengthening domestic demand. One reason for this appears to be rising household borrowing – credit growth, both for consumption and real estate, has picked up. That said, we are concerned by the pace of credit growth, and the fact that it is increasingly being funded from abroad,” said the report issuer.
It added that Qatar’s inflation rate rose from 1.5% in September to 1.7% in October, which is attributable to a rise in food prices.
In spite of low global energy prices, Qatar is still running a current account surplus. In contrast, Oman and Bahrain were ill-prepared for a period of low oil prices and both countries are likely to run twin budget and current account deficits over the coming years. Low savings in these countries mean that fiscal policy will need to be tightened more aggressively than elsewhere in the GCC, said Capital Economics.
