FocusEconomics revises up Qatar GDP forecast to 2.9%

Satyendra Pathak Doha FocusEconomics has revised Qatar’s GDP forecast for 2021 to 2.9 percent, which is up 0.1 percentage points from last month’s foreca...

Satyendra Pathak Doha FocusEconomics has revised Qatar’s GDP forecast for 2021 to 2.9 percent, which is up 0.1 percentage points from last month’s forecast. According to FocusEconomics Consensus Forecast-Middle East & North Africa for June report, Qatar’s economy is expected to grow further at a higher rate of 3.6 percent in 2022.Qatar’s economic outlook continues to improve as the country’s economy appeared to be resilient in the first quarter of the year, it said in its latest monthly report.“Qatar’s economy is set to return to growth this year on stronger domestic and foreign demand. Investment in the energy sector and easing tensions with Gulf neighbours should also aid activity,” the report said.While Qatar’s non-energy private sector Purchasing Managers Index (PMI) was well in the expansionary territory during the first quarter, the report said, the performance of the energy sector improved in the first quarter of 2021 compared to the fourth quarter of 2020 as suggested by the industrial production data.Heading into the second quarter, year-on-year comparisons will be flattered by the highly favourable base effect, but underlying momentum seems to have softened, the report said, More positively, the report said, the lower number of COVID-19 cases in recent days led the government to begin easing restrictions in four phases. During the first phase, which began on May 28, most public venues are open, but with strict capacity limits.“Qatar’s consumer prices rose 1 percent in annual terms in April, contrasting March’s 0.3 percent fall. Inflation is seen rising later this year on higher food and energy costs, recovering activity and a supportive base effect,” the report said.“The possible implementation of a VAT is an upside risk. Our panellists see consumer prices rising 1.3 percent in 2021, which is up 0.1 percentage points from last month’s forecast. In 2022, our panel sees inflation averaging 2.3 percent,” it said.According to the annual data released as part of the report, the overnight lending rate in the country would continue to rise from the current level of 2.5 percent and reach up 4.07 percent by 2025.The Qatari riyal will continue to be pegged at $3.64 in the years to come, it said.The country would witness a sustained increase in both imports and exports in the coming years. While the merchandise exports from the country is expected to rise from $67.7 billion in 2021 to $89.3 billion in 2025, the report said, merchandise imports would increase from $28.3 billion in 2021 to $36.9 billion in 2025.FocusEconomics, a leading provider of economic analysis, has also forecast that Qatar’s trade balance would rise from $27.1 billion in 2020 to $39.4 billion in 2021 and further grow to $52.4 billion in 2025. The report has projected that Qatar’s current account balance will account for 4.2 percent of the total GDP in 2021 and rise up to 7.5 percent in 2025.Qatar’s current account balance will turn positive in 2021 with a surplus of $7.4 billion, the report said adding it will continue to rise onwards and reach up to $15.3 billion in 2025. Qatar’s GDP per capita will rise from $52,224 in 2020 to $60,235 in 2021 and rise up to $72,105 in 2025, the report said.