Qatar is expected to have posted a smaller current account surplus in 2009 than previous years but it is likely to rebound this year as higher hydrocarbon prices should help oil and gas exports recover this year, National Bank of Kuwait said in a country study.
The goods surplus fell sharply in 2009 owing to a 30 per cent drop in hydrocarbon revenues.
As a result, the study expects Qatar to have recorded a smaller current account surplus in 2009 than in previous years.
Higher hydrocarbon prices should help oil and gas exports recover this year, pushing the current account surplus to around 23 per cent of GDP, exceeding previous levels and highlighting the gas exports.
Qatar’s growth will remain strong over the coming years, driven by an expanding gas sector and increased government spending. Nonetheless, weaknesses may still emerge. For one, the real estate sector may deteriorate particularly commercial real estate where there is oversupply.
Otherwise, growing dependence upon gas exposes Qatar to shocks in that sector/commodity. However, a determined drive to diversify the economy and strong government backing should help shield Qatar and secure continued growth.
Meanwhile, the Qatari economy maintained its fast paced expansion with real economic growth in 2009 estimated at 9.8 per cent. The economy should continue to grow rapidly, supported by Qatar’s strong fundamentals.
“We do not think that weak spots in the global economy will slow growth, and we expect real GDP growth to accelerate in 2010 and 2011. After that, it should moderate to single digits as Qatar reaches its LNG production target,” the study said.
The next two years are also expected to see a sizeable increase in output coming online as Qatar progresses towards its production goal of 77 million tonnes per year of gas, almost 3.4 million barrels of oil equivalent per day at the end of 2011. This would almost double the 2009 year-end production.
The study said non-hydrocarbon sectors have also seen considerable growth in recent years, and are expected to grow further.
Qatar’s plans to diversify the economy have driven large investments in, among others, the manufacturing, infrastructure, health, and education sectors. The non-hydrocarbon sectors grew an estimated nine per cent in real terms in 2009 and are expected to expand 15 per cent in 2010.
The financial and real estate sectors contributed the largest share of non-hydrocabon GDP at almost 25 per cent. Apart from feeding off growth in the hydrocarbon sector, these sectors are also supported by a rapidly expanding population