Qatar economy weathers storms of year-long blockade
DUBAI: Qatar has weathered the economic impacts of a stifling Saudi-led blockade, maintaining healthy growth, but some sectors continue to pay the price a year after the crisis erupted.
On June 5, 2017, Saudi Arabia, the United Arab Emirates ( UAE) and Bahrain -- all partners of Qatar in the Gulf Cooperation Council (GCC) -- along with Egypt, severed ties with Qatar.
Accusing Doha of supporting radical Islamist groups, they imposed a land, sea and air blockade.
Gas-rich Qatar tapped into its massive wealth to absorb the early shocks to its financial system, and secure alternative food supplies, maritime routes and ports, reports said.
The blockading nations, already under economic hardship from low oil prices, have also suffered losses from the ongoing standoff, analysts argue.
Economic integration programmes among the six-nation GCC, which were progressing at a snail’s pace, have suffered the most and the future of the regional alliance has been thrown into doubt.
“The latest data from Qatar reiterate that the worst of the hit to the economy from its diplomatic crisis with Saudi Arabia and its allies has now passed,” said Capital Economics in a report in May.
Doha injected tens of billions of dollars to offset a drop in banking deposits at the start of the crisis and succeeded in bringing the banking sector back to normal operations.
“Growth performance remains resilient.
The direct economic and financial impact of the diplomatic rift between Qatar and some countries in the region has been manageable,” the International Monetary Fund said in a report on Wednesday.
Despite the drop in oil revenues, Qatar achieved a growth rate of 2.1 per cent in 2017, almost unchanged from the previous year, and is forecast to rise to 2.6 per cent this year, according to the IMF.
“Qatar’s economy has suffered on several fronts as new logistics links proved to be more expensive in the short term,” Andreas Krieg, a professor at King’s College London, told AFP. — AFP