Qatar pub­lic debt to GDP set to fall to 44.5% in 2024: Fo­cusE­co­nomics

Gulf Times - Gulf Times Business - - FRONT PAGE - By Pratap John

Qatar’s pub­lic debt as a per­cent­age of the coun­try’s gross do­mes­tic prod­uct (GDP) will fall con­tin­u­ously over the next five years, from 52.9% this year to 44.5% in 2024, re­searcher Fo­cusE­co­nomics has said in a report.

The coun­try’s pub­lic debt is es­ti­mated to fall to 50.3% (in 2020), 48.4% (in 2021), 47.6% (in 2022) and 46.1% (2023).

The coun­try’s fis­cal bal­ance as a per­cent­age of GDP is set to rise to 4.4% in 2024 from an es­ti­mated 1.7% this year.

Qatar’s mer­chan­dise trade bal­ance will scale up fur­ther and ex­ceed $63.9bn in 2024, the report said. This year, Fo­cusE­co­nomics has pro­jected the mer­chan­dise trade bal­ance at nearly $42.9bn.

The cur­rent ac­count bal­ance (as a per­cent­age of GDP) will be 5% in 2024 com­pared with 5.3% in 2019. Qatar’s gross do­mes­tic prod­uct is ex­pected to reach $241bn by 2024, it said. By the year-end, GDP may to­tal $193bn.

Qatar’s eco­nomic growth in terms of nom­i­nal GDP will reach 4.8% in 2024 from 1% by the year-end. In­ter­na­tional re­serves may ex­ceed $39bn in 2024, from the cur­rent $36.4bn; Fo­cusE­co­nomics es­ti­mated it will cover 10.8 months of coun­try’s im­ports by then.

The coun­try’s in­fla­tion, the report noted, will be 1.9% in 2024 and -0.4% this year.

Qatar’s un­em­ploy­ment rate (as a per­cent­age of ac­tive pop­u­la­tion) will re­main a mea­gre 0.2% in 2024, un­changed from this year. Ac­cord­ing to Fo­cusE­co­nomics, Qatar’s econ­omy will likely “gather mo­men­tum” next year due to a “stronger” en­ergy sec­tor as the

Barzan gas fa­cil­ity comes on­line and in­vest­ment into the ex­pan­sion of the North Field gas pro­ject picks up. Nev­er­the­less, geopo­lit­i­cal ten­sions and volatile com­mod­ity prices re­main down­side risks to the out­look. Fo­cusE­co­nomics pan­el­lists see growth of 2.5% in 2020, which is un­changed from last month’s forecast, and 2.6% in 2021. Con­sumer prices fell 0.8% in an­nual terms in Oc­to­ber, con­trast­ing Septem­ber’s mar­ginal 0.1% uptick.

In­fla­tion should ac­cel­er­ate next year, with the ex­pected im­ple­men­ta­tion of a 5% VAT and newly-agreed labour re­forms in Jan­uary 2020 pro­vid­ing up­ward pres­sures. More­over, “re­cent signs of a re­cov­ery in the hous­ing mar­ket and an ex­pected pickup in eco­nomic ac­tiv­ity” should also “stoke prices” next year.

The re­searcher’s pan­el­lists ex­pect av­er­age con­sumer prices to in­crease 1.9% in 2020, which is un­changed from last month’s forecast. In 2021, it sees in­fla­tion eas­ing to 1.5%.

The coun­try report also said the econ­omy “shrunk” year-on-year in the se­cond quar­ter, weighed on by an “un­ex­pected con­trac­tion” in the non-min­ing and quar­ry­ing sec­tor, and a “fall” in min­ing and quar­ry­ing out­put.

Turn­ing to the third quar­ter, the econ­omy should have “im­proved” but will have “re­mained sub­dued” none­the­less.

Qatar’s in­dus­trial pro­duc­tion out­put strength­ened in Q3, which “bodes well” for the hy­dro­car­bon and man­u­fac­tur­ing sec­tors, Fo­cusE­co­nomics said.

The value of mer­chan­dise ex­ports, how­ever, “tum­bled” in Q3, due to lower prices for oil and gas com­pared to the same pe­riod last year, Fo­cusE­co­nomics noted.

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