Qatar economy ‘strengthens’, says IMF
Qatar’s economic performance continues to strengthen, the International Monetary Fund said in an upbeat assessment of the island state in November 2018. The economy grew by 2.5% in the second quarter of the year after a downwardly revised 3.1 % contraction in the previous three month period. The rst quarter had previously recorded 1.4% growth. Non-hydrocarbon output grew by about 6 percent during the rst half of 2018, as the economy recovered from the impact of the diplomatic rift and oil prices surged. The economy is on track to post growth 2.7% in 2018, according to the International Monetary Fund. The forecast in its October 2018 world economic outlook was a slight increase from the 2.6% it had pencilled in in April. The IMF expects that the economy grew 1.6% in 2017, which was the lowest since 1994. The IMF’s biannual forecasts show growth of 2.8% (up from 2.7% in April) and 2.6% and 2.7% in 2021 and 2021 respectively (the same as six months earlier). The World Bank said in its latest economic forecasts that growth was forecast to accelerate from 2.3% in 2018 to 2.7% in 2019 and 3.0% in 2020.
Qatar eyes 2019 budget surplus
Qatar’s budget position is expected to improve further and close 2018 on a surplus and maintain that balance into the next decade. Spending was expected to show modest overall annual growth in 2018 as restraint in current spending continued and as capital expenditure on large infrastruc- ture projects and the 2022 World Cup starts to atten out. Revenues will be boosted by higher hydrocarbon revenues as the full bene t of the doubling of crude prices from June 2016’s level is felt. The introduction of VAT in 2019 will raise revenues by around 1.25% of GDP, helping to even out the ow of government revenues. The International Monetary Fund used its October 2018 forecasts to set out a more benign path for the public nances. It now expects the budget to return to surplus in 2018 by 3.6% of GDP, rather than just 2.8% as forecast six months earlier. It then sees the surplus rising to 10.5% in 2019 and 11.5% in 2020, rather than 7.5% and 6.8% respectively in its April 2018 report. It then sees a surplus of 10.4% rather than 5.5% in 2021. Qatar de ed expecta- tions as it took in orders of more than $32bn after opening the books for $12bn of 5-, 10-, and 30-year sovereign bonds in April 2018. This was an even larger issue than rival Saudi Arabia’s $11bn sovereign bond issue in the same month. Qatar also issued a $9bn bond in June 2016 year with maturities of ve, 10 and 30 years. The country’s access to the international bond market has been complicated by the economic embargo by its neighbours. The country has built up foreign asset reserves mainly due to the activity of the Qatar Investment Authority, its sovereign wealth fund. Qatar has a reserve of $340bn including assets of its sovereign wealth fund that could help the country to withstand the isolation from its neighbours in the Gulf, the Governor Sheikh Abdulla bin Saud Al-Thani told CNBC in July 2017.