Global Arab Network | GDP Growth in Qatar to Go Higher than 14 % in 2010

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GDP Growth in Qatar to Go Higher than 14 % in 2010

Monday, 30 August 2010 12:59

Qatar (Doha) - Qatar's real Gross Domestic Product (GDP) for 2010 is estimated to grow by 14.5%, driven by increased production and exports of Liquefied Natural Gas which will be around 45 million tones, and robust contribution from non hydro carbon sector, according to a top economic review publication.

Qatar Economic Review, a publication of Qatar National Bank Capital, with figures sourced from Qatar Statistics Authority (QSA), forecasts the real GDP to grow by 14.5% this year and 17% for 2011.

Besides natural gas sector, most of the contribution, from the non-hydro carbon sector, towards this projection is estimated from transport and communications, finance, insurance, real estate, trade, restaurants, hotels and other services sectors.

The projections are based on first quarter performances and sound parameters applied to the respective sectors. The nominal GDP figures released by the QSA for the first quarter of 2010, have shown growth of 22.7% to reach QR102.5 billion, compared to QR83.6 billion in the first quarter of 2009.

The non-oil and gas sector had a share of 53.8% of the overall GDP last year with the gas fields accounting for 24.5% and the oil wells for 21.7%. In fact Qatar's nominal GDP growth has averaged 27.2% from 2005 to 2009. It is estimated to grow by 28.1% 2010 and by 25.5% next year, the review said. In 2009 it was QR 357.860 billion and for 2010 it's estimated to be QR 458.525 bn.

The economic review forecasts the main growth drivers for the economy in 2010 and 2011 to be: the natural gas sector with LNG production reaching 45 million tones in 2010 and 60 million tones in 2011; Condensate production will reach 400,000 bpd in 2010 and around 500,000 bpd in 2011; Pipeline gas production will reach 2.8 billion cubic feet per day in 2010 and around 4 billion cubic feet per day in 2011; Higher oil and gas prices; the non-oil and gas sector is forecast to remain strong with a 15.8% growth in 2010 and 15.0% in 2011, mainly due to the rapid growth in Manufacturing (Petrochemicals, Fertilizers, Aluminum, GTL s, Refining), Transport and Communications and Infrastructure. (MORE)

Qatar's economic outlook is termed stable by three prominent credit rating agencies spurred by the country's new project plans in Liquefied Natural Gas over the next two years and positive growth prospects in oil and gas as well as other key petro-chemical sectors.

The world's three premier ratings agencies - Capital Intelligence, Moody's and Standard and Poor's (S&P) - have rated Qatar's economic outlook to be 'stable'. Currently Qatar's sovereign ratings are the highest among GCC countries, the review said.

S&P last month raised Qatar's sovereign long-term foreign and local currency ratings from AA- to AA and the short-term at A-1+. This rating upgrade followed Qatar government boosting its fiscal and external balance sheets. The AA band rating implies there is no doubts about the entity's capacity and commitment to honour obligations.

Qatar, whose population is 1,696,563 according to 2010 census figures, sovereign ratings have received upgrades over the last three years despite the global recessionary trend. In January 2008, Capital Intelligence had raised sovereign long-term foreign and local currency ratings to AA- from A+ and the short-term to A1+ from A1.

A year earlier, in July 2007, Moody's had upgraded the long-term foreign and domestic currency government bond ratings and the country ceiling for long-term foreign currency bank deposits to Aa2 from Aa3. This promotion was based on strengthening public and external finances as well as prudent use of oil and gas export receipts compared to the previous oil booms.The spurt in growth is due to the performance of the companies here as well as international market trends which has seen a rise in energy prices and higher exports of LNG. Qatar has huge gas reserves and the government is using this resource and the funds flowing from it to develop infrastructure, including education and health facilities, and modern hydrocarbon operations.

Qatar's economic growth has been further catalysed by reforms, favourable economic environment, stability as endorsed by the international ratings agencies, and promotion of private enterprise as well as boosting foreign investment.

Although hydrocarbons still account, on an average, 50 per cent of Qatar's GDP, economic diversification has become one of the drivers of the expanding economy in recent times. The country's leadership has promoted new initiatives in other sectors like communications, transport, infrastructure, building construction, trade, tourism and hospitality, education and developing a knowledge-based economy as part of the 2030 Vision document.

In fact, the non hydrocarbon sector surpassed the traditional sector of growth for the first time last year. "Economic diversification has become the cornerstone of the Qatari economy with the non-oil and gas sector overtaking the oil and gas sector for the first time in 2009, and also with the gas sector overtaking oil as the single largest contributor to the economy," the economic review said.

The non-oil and gas sector overtook the hydrocarbon sector for the first time in 2009, contributing 53.8% of total GDP, and recording a growth of 2.4% over 2008.

The main components of this sector were:-

In 2009 Other Services sector, which includes government, social, household services, imputed bank service charges and import tariffs, made the largest contribution to GDP of the non-oil and gas sectors, reflecting a growth of 34.4% last year and contributed QR44,147 million, which represented 12.3% of total GDP.

Next was the Finance, Insurance and Real Estate sector which made the second largest contribution to GDP among the non-oil and gas sectors. It comprised five sub-sectors: banking, insurance, financial intermediation services, real estate and business services. In terms of relative contribution to GDP, this sector contributed QR43,374 million, and grew by 13.8% at current prices in 2009. This sector represented 12.1% of Qatar s GDP in 2009.
(QNA)

Global Arab Network

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Last Updated on Monday, 30 August 2010 13:07

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