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Home » QCB: Qatar to register strong economic growth this year By Lani Rose R Dizon I The Peninsula
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QCB: Qatar to register strong economic growth this year By Lani Rose R Dizon I The Peninsula

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Qatar will likely maintain its position as one of the fastest growing economies in the GCC and will register a strong growth in 2019, the Qatar Central Bank (QCB) said in its 2018 Annual Report which was released yesterday.

It added that favourable movements in global oil prices, strong exports and improvement in fiscal balance are likely to provide overall macroeconomic stability in 2019.

While the Qatari economy remained robust and stable last year, real GDP growth has somewhat moderated to 1.4 percent in 2018, from 1.6 percent in 2017. With several FIFA World Cup 2022 related projects near completion stage, and as a result of the ongoing economic diversification strategy, sources of growth for non-hydrocarbon sector have been getting diversified.

Going forward, as per the Qatar Economic Outlook released by Planning and Statistics Authority, real GDP is projected to grow at average rate of 2.8 percent during 2018-2020. The estimated budget surplus will fall to QR4.35bn in 2019,  from a surplus of QR15.1bn in 2018, because of increase in expenditure on major projects by 15 percent.

Total public revenue is estimated to increase by 1.5 percent to QR211bn. Revenue from ‘oil and gas’ is budgeted at QR168bn, a decline of three percent from the actuals of 2018. Revenue from ‘miscellaneous transferable’ is budgeted at QR43bn, an increase of 23.6 percent over the actuals of 2018, reflecting the government efforts to diversify revenue from non-oil and gas sources.

Total public expenditure has also been budgeted at QR206.7bn during 2019, an increase of 1.7 percent and 7.2 percent over the budget estimates and the actual of 2018, respectively.

According to the QCB report, payment systems in Qatar comprising of retail and wholesale segment grew in comparison to the previous year, both in value and in volume terms. The size of Qatar’s payment system was QR4.1 trillion in 2018.

Also, shares in the Qatar Stock Exchange (QE) have risen significantly as the world’s best performing performer, with the current account surplus increasing and the country’s large foreign exchange reserves rebuilt.

More recently, total reserves in the banking system remained stable at QR80.3bn in July, which showed a 9.7 percent increase from July 2018 and a 43.7 percent increase since the second month of the blockade in July 2017, Al Byraq Center for Economic and Financial Studies noted in its weekly analysis.

The mandatory reserve also grew to QR 37bn compared to QR36.6bn a year ago, and QR35bn two years ago. This reflects the steady increase in the volume of deposits in the commercial banks.

According to the annual comparison, the bank’s surplus from reserve balances, which was deposited with the Central Bank, stabilised at QR4.55bn in July, compared to QR7.9bn earlier last year, indicating improved liquidity management at banks operating in Qatar.

The net foreign assets increased by 52.3 percent to QR139.97bn in July 2019 compared to the same period in 2018.  In its report, the QCB reiterated that the Qatari economy was completely out of the initial negative effects of the economic blockade imposed since June 2017.

This was reflected in the return of capital flows, the convenient liquidity position of the banking system, official foreign reserves that returned to pre-blockade level, healthy growth in private sector and reasonable growth in the non-hydrocarbon sector.

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