Qatar expected to register trade surplus of above $40 bn in 2021

Satyendra Pathak Doha Qatar is expected to achieve a trade surplus of $40.5 billion in 2021 and it will continue to rise up to $50.4 billion in 2025, Foc...

Satyendra Pathak Doha Qatar is expected to achieve a trade surplus of $40.5 billion in 2021 and it will continue to rise up to $50.4 billion in 2025, FocusEconomics, a leading provider of economic analysis, has said in its latest report.According to FocusEconomics Consensus Forecast-Middle East & North Africa report for July, the country would witness a sustained increase in both imports and exports in the coming years. While the merchandise exports from the country are expected to rise from $68.4 billion in 2021 to $87.7 billion in 2025, the report said, merchandise imports would increase from $27.9 billion in 2021 to $37.3 billion in 2025.The report has projected that Qatar’s current account balance will account for 4.5 percent of the total GDP in 2021. The percentage of the current account balance would rise to 7.2 percent in 2025, the report said.Qatar’s current account balance is expected to turn positive and reach $7.7 billion in 2021, the report said, adding that it will continue to remain in the positive territory for the next four years and reach up to $14.7 billion in 2025.The report has also indicated that the GDP per capita in Qatar will increase from $61,171 in 2021 to $71,681 in 2025.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 to 4.07 percent by 2025.The Qatari riyal will continue to be pegged at $3.64 in the years to come, the report said.The report said that Qatar’s economic activity appeared to be resilient in the first quarter as the non-energy private sector PMI was well in expansionary territory, while industrial production data suggested that the country’s energy sector performed better compared to 2020.Turning to the second quarter, the report said, Qatar’s industrial production expanded in annual terms in April. However, momentum in the non-energy sector seemed to ease early in the quarter amid the progressive tightening of restrictions to combat the second wave of COVID-19 with the private sector PMI declining in April and May.More positively, the government began to loosen restrictions in four phases from May 28 that saw the PMI recover in June. In other development, the report said, Qatar Petroleum recently completed a $12.5 billion bond sale. “The funds should help Qatar boost its energy output in the coming years, with the government aiming to raise LNG production to 126 million tons per annum by 2027, up from 77 million currently,” it said.“The country’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. However, the potential extension of restrictions and new variants of COVID-19 pose downside risks,” the report said.FocusEconomics panellists see a 2.7 percent rise in GDP in 2021, which is down 0.2 percentage points from last month’s forecast, before growth of 3.7 percent in 2022.Inflation in the country jumped to 2.5 percent in May from 1 percent in April, the report said. “Price pressures should be notably higher this year than last due to higher food and energy costs, recovering activity and a supportive base effect. The possible implementation of a VAT is an upside risk to prices going forward. Our panellists see consumer prices rising 1.4 percent in 2021, which is up 0.1 percentage points from last month’s forecast. In 2022, our panel sees inflation averaging 2.4 percent,” the report said.