LNG to bolster Qatar’s 2011 growth
Kuwait, May 25, 2011
Qatar is heading for another year of fast growth in 2011, underpinned by a final sizeable increase in LNG production, bringing total capacity to the targeted 77 million tonnes per year, said a report.
Buoyed by rising oil prices and increased revenue from rising LNG production, Qatar is expected to record sizeable budget surpluses of 14 per cent of GDP in 2011 and 12 per cent in 2012, according to the latest GCC Brief from NBK, the leading bank in Kuwait.
From 2012 onwards, growth is set to slow as output from the hydrocarbon sector plateaus, it said.
The non-hydrocarbon sector will be targeted to provide the bulk of future growth through the recently unveiled National Development Strategy 2011-16, which will help achieve Qatar’s long term goals and supply the investment needed to host the 2022 World Cup.
Real GDP will expand by 15 per cent in 2011 and 6 per cent in 2012, following estimated growth of 17 per cent in 2010, the report said.
Real hydrocarbon sector output will rise by 18 per cent this year and 3 per cent in 2012, while growth will be led by the gas sector, where output is expected to increase by 30 per cent in 2011, according to the report.
This will be followed by a 4 per cent increase in output in 2012 after which the moratorium on new gas projects takes effect and is due to last until at least 2014.
Meanwhile, oil production will remain broadly stable over the coming two years at 0.8 million barrels per day, the brief said.
Growth in the non-oil sector will largely benefit from the government’s national development strategy that plans to spend $125 billion over five years.
Some $65 billion of this is from direct government spending and the rest from government related entities. It will be used to upgrade and expand the country’s infrastructure, with the education, health, financial, housing, and transportation sectors set to be among the main beneficiaries.
The brief forecasted a real non-oil GDP growth of 11 per cent in 2011 and 10 per cent in 2012, compared to an average of 21 per cent per year between 2001 and 2009.
In 2009 and 2010, Qatar experienced deflation of 4 per cent and 2.4 per cent, respectively, largely due to falling housing rents. However, by the fourth quarter of 2010, the consumer price index (CPI) had started heading north again, boosted primarily by increasing food prices and transportation costs, and some easing in the downward pressure on housing rents.
Broader conditions - strong economic growth, improving monetary conditions, rising food prices and a weak US dollar - look conducive to a further increase in prices through the rest of this year, according to the report.
Inflation may average 4.0 per cent in 2011 and 6.5 per cent in 2012, the report said. – TradeArabia News Service