Qatari economy is projected grow faster than Saudi Arabia and UAE in 2018. The country’s expansion pace is expected to rise next year even if the blockade persists, reported Bloomberg TV.
Qatar growth is forecast to slightly trimmed to 2.5 percent for the current year in the Bloomberg’s latest survey, compared with 3.1 percent in the previous survey conducted in June. The 2018 outlook, however, remained unchanged from the June survey standing at 3.2 percent.
Despite facing the slowest growth in more than two decades in 2017, Qatari economy is still forecast to expand the most in the six-nation Gulf Cooperation Council -- ahead of Saudi Arabia at 0.5 percent and the UAE at 2 percent, according to Bloomberg’s latest surveys, the report said.
Analysts told Bloomberg TV that Qatar will eventually adapt to the blockade. If the ongoing bilateral trade agreements work successfully, Qatar will continue to grow in long-term. It will also give a boost to the local productions.
Qatar’s optimism is strongly reflected in the survey. Expectations for higher growth in 2018 are independent of whether the boycott on Qatar is lifted, said both Jackson at Capital Economics and Farouk Soussa, London-based chief economist for the Middle East at Citigroup Inc.
“We expect the disruptive impact of the boycott to have evaporated by next year,” Soussa said. “Trade routes will have been fully reconfigured, confidence will have been restored, building will recommence -- all possibly against a backdrop of a continued boycott, but one that the economy has adapted to.”
Expectations are high for Qatar growth in 2018. The economy is expected to adapt to the boycott eventually. The assumption is that the sanctions and the conflicts will not be further escalated. Economy will absorb the costs of the initial shocks of the blockade and the weakening investor confidence will get a boost going forward. When Qatar moves to 2018, the QP will embark on its plans to ramp up oil production. By 2022-2024 we could also a spike in LNG production, analysts said.
In its its latest macroeconomic outlook for Qatar, NBK noted the country’s growth is expected to pick up to 2.5 percent in 2017 from 2.2 percent in 2016 on higher oil and gas output and further expansion in the construction, financial services and transportation sectors. NBK analysts said the growth is expected to accelerate to 3.1 percent in 2018, driven by gains in LNG, natural gas and condensates output on the hydrocarbon side.
The government’s $200bn public infrastructure program, which it is executing as part of its Vision 2030 diversification strategy and FIFA World Cup 2022 plan, will underpin growth in this sector, even while the government continues to keep a tight rein on current expenditures.