Qatar’s real GDP may expand by only 5% this year, down from an estimated 6% in 2012 as “weaker performance” by the country’s hydrocarbon sector is likely to drag down overall growth, BMI has said in a report.
Despite high oil prices, the country’s hydrocarbon sector sharply slowed down from about 15.8% in 2011 to only 1.7% in 2012 after the country completed mega gas projects and maintained a moratorium on new LNG ventures. In contrast, non-oil GDP surged by around 10% in 2012.
While growth in the key hydrocarbon sector, which still drives the national economy, is set to slow down mainly due to declining yields from maturing oil fields, the non-oil and gas activity will continue apace by construction activity and continued vitality in services’ segment.
The government is aiming to bolster the non-energy sectors in an effort to help raise their share in the country’s GDP. This is in line with the national policy to diversify the economy away from oil and gas.
The International Monetary Fund (IMF) has projected that growth in Qatar’s non-hydrocarbon sector will range between 9% and 10% in the medium term, while the hydrocarbon sector is projected to grow between 1.1% and 3.5%.
Despite concerns about long lead-times in majority of planned projects and rising construction costs, BMI maintains its overall bullish outlook for Qatar’s construction sector.
“Strong appetite for public spending coupled with a stable business environment will help ensure that Qatar will comfortably achieve its ambitious infrastructure development targets ahead of the 2022 FIFA World Cup and in line with its own 2030 Vision. For investors, these factors will position Qatar as a safe haven for regional investors,” it said.
Qatar’s fiscal policy is set to “remain expansionary” over the medium term and BMI projects government consumption to grow by a robust 12% in 2013.
Ahead of the 2022 World Cup and in line with the country’s 2030 Vision, Qatar’s spending on infrastructure is expected to reach $150bn. A series of projects are in the pipeline, including a $1bn transport corridor project in Doha; $20bn investment in roads; $25bn to be invested in railways; $15.5bn to be spent on a new airport; $4bn to be invested in stadiums; $8bn to be spent on a deepwater seaport; tens of thousands of hotel rooms to be built; and even a new city, BMI said.
For 2013, the government has initiated a major infrastructure upgrade of the road network in the country, which is likely to result in a sharp increase in contracts, it said.
Source: Caye Global News, Gulf Times
Oil, Gas and Petrochemicals by Dr. Theodore, now available on these stores:
Oil – Gas Exploration & Drilling: