This year will be another one of rapid growth for Qatar as LNG production experiences another sizeable boost. According to a report, these increases will result in a total capacity reaching 77 million tonnes annually.
Supported by increasing oil prices and higher revenues from greater LNG production, Qatar is forecasted to report a significant budget surplus – 14 percent of the GDP for this year and 12 percent of the GDP for next year. These figures are reported in the most recent GCC Brief from the leading Kuwaiti bank, NBK.
Growth will slow down after 2012 as hydrocarbon outputs hit a plateau, according to the report.
Non-hydrocarbons are targeted to generate most of the future growth for the nation, as outlined in the National Development Strategy 2011 – 2016. This drive will allow Qatar to reach the long-term goals, as well as generate the investments necessary to host the upcoming 2022 FIFA World Cup.
In 2011 the real GDP will surge by 15 percent, followed by a 6 percent expansion in 2012. Growth for 2010 was estimated at 17 percent, according to the report.
Output in the real hydrocarbon sector will increase by 18 percent in 2011 and a further 3 percent next year. Growth is forecasted to be driven mainly by the gas sector, with increased output of 30 percent for this year as noted in the report.
Gas output in 2012 will experience an increase of 4 percent. From that point the moratorium covering new gas projects goes into effect and is set to last until 2014 and possibly beyond.
The report also noted that production of oil will be maintained in the next two years at a level of 0.8 million bpd.
The non-oil sector will experience growth mainly from the national development strategy, where government plans will see $125 million spent over a five-year period.
Around $65 billion of this comes directly from the government, while the balance will flow through GREs (or government-related entities). These funds are marked for upgrades and expansions to the nation’s infrastructure, as well as projects within the financial industry, education, housing, transportation and health.
The report spelled out expectations for growth of real non-oil GDP at 11 percent for this year and a further 10 percent for next year. From 2001 to 2009 this figure grew by 21 percent annually on average.
Qatar saw deflation in 2009 (4 percent) and 2010 (2.4 percent), mainly as a result of decreasing rents. The CPI (consumer price index) was on the rise again by the last quarter of 2010 thanks to rising costs in food and transportation, as well as an easing of the pressures facing rent costs.
Conditions such as strengthening economic growth and an improved monetary climate, along with higher food prices and a weakened US dollar, will likely contribute to rising prices throughout the balance of the year, based on the report’s findings.
Inflation is expected to average 4.0 percent for 2011 and rise to 6.5 percent for 2012, according to the report.Paul Holdsworth, Staff Writer, Gulf Jobs Market News