Qatar’s real GDP growth to hit 6.8pc in 2014
Doha, January 5, 2014
Qatar’s real GDP was poised for a solid 6.8 per cent growth in 2014 as the implementation of large infrastructure projects accelerates and the fast-growing population boosts domestic demand, according to a report.
The country’s economic growth accelerated at a buoyant 6.2 per cent pace in the third quarter compared to the year before spurred by double-digit growth in trade, restaurants and hotels; construction; transport and communication; financial, real estate, and business services; as well as domestic services, stated Qatar National Bank (QNB) citing official data.
The hydrocarbon sector, which consists of crude oil and raw gas production, perked up and expanded to a better-than-expected 1.8 per cent year-on-year in the third quarter owing to higher production of natural gas due to LNG facilities coming back to full operational capacity after some downtime for maintenance over the last year, it added.
According to QNB, the non-hydrocarbon sector grew 9.5 per cent year-on-year in third quarter of 2013, driven by a strong growth in services.
Transport and communication was the fastest growing sector (13.9 per cent year-on-year), owing to the Ramadan period of festivity which boosted travel and tourism, as well as higher mobile subscribers which is a key characteristic of the stronger growth in private consumption boosted by the larger population, the Qatari bank said in its report.
The financial, real estate, and business services sector grew rapidly (10.5 per cent year-on-year), as real estate services were boosted by the growing population. The non-hydrocarbon sector was further boosted by the construction sector, which accelerated to 13.0 per cent year-on-year as Qatar’s infrastructure development program is gathering momentum, it stated.
According to QNB, the massive infrastructure investment program will have a direct effect on GDP growth through higher investment spending and an indirect effect through population growth.
"A new wave of expatriate workers is coming into Qatar in response to higher labour demand for infrastructure projects. Indeed, population continued its double-digit growth (11.4 per cent year-on-year) in the year to the end of December 2013, driven by the large ramp up in infrastructure spending," the bank said in its report.
"The larger population will continue to drive economic growth by boosting domestic demand, services as well as investment in housing and other infrastructure. Accordingly, small and medium-sized enterprises, such as hotels, education, medical services, retail and restaurants are expected to flourish in order to cater to the growing population," it added.
However, QNB cited some concerns of economic overheating arising from the infrastructure program.
"Those concerns can be alleviated by considering the latest GDP data for the construction sector which indicates that pricing for building materials are falling. This leads to the conclusion that there is no excess demand for building materials and no shortage in supply that could lead to potential bottlenecks in the implementation of those programs," he noted.
On its 2014 outlook, QNB Group said it expects real GDP growth to accelerate further to 6.8 per cent in 2014 driven by the implementation of additional large infrastructure projects, like the Lusail real estate development, the new Doha Port, the new Hamad International Airport and the Doha Metro Rail project.
The key driver of growth will therefore continue to be the non-hydrocarbon sector which is expected to grow from 42 per cent of nominal GDP in 2012 to more than 50 per cent by 2015, it added.-TradeArabia News Service