Source: Arab News
QNB Group has updated its forecasts for the Qatari economy for the period 2012-13, based on the recent release of full year 2011 GDP data by Qatar Statistics Authority. The update includes various oil price scenarios. Nominal GDP is forecast to surge by 19.8 percent in 2012 and rise by a further 5.4 percent in 2013 to QR798 billion as the non-hydrocarbons sector takes over from hydrocarbons sector as the main driver of growth.
The baseline forecasts assume that oil prices will average $120 per barrel in both 2012 and 2013. Qatari crude oil prices have averaged $119 per barrel for the first quarter of 2012, with an average of $125 per barrel in March 2012.
Given recent oil price volatility, it is important to consider the impact on our forecasts of various oil price scenarios. If the oil price in 2013 were to fall below to $110 a barrel, then GDP would contract by 1.3 percent. Conversely, if oil prices rose from $120 a barrel in 2012 to $130 a barrel in 2013, then Qatar’s nominal GDP would grow by about 12.2 percent, more than double the baseline growth forecast, which assumes prices average $120 a barrel in 2012-13.
In its baseline scenario, QNB Group expects that hydrocarbon GDP will represent 59 percent of total GDP in 2012, compared to 58 percent in 2011 due to higher prices and increases in output. In 2013, the share of hydrocarbon GDP will fall back to 58 percent as QNB Group expects hydrocarbon prices and production to level off while the non-hydrocarbon sector grows strongly.
For the hydrocarbons sector, 2012 will be first full year for the production of liquefied natural gas (LNG) at the maximum capacity of 77m tons. This represents a 16 percent increase in production over 2011. A major new gas-to-liquids (GTL) facility (Pearl GTL Project) will also have its first full year at new capacity in 2012 at an average of 139,000 barrels/day, leading to a 126 percent increase in output, followed by a further 25 percent increase in 2013.
The increase in gas production to feed LNG trains and the GTL plant will lead to a 24 percent increase in the production of condensates to an average of 805,000 barrels a day in 2012-13. Condensates are a high-quality hydrocarbon that are associated with the production of natural gas and become liquid at surface pressures.
These output increases combined with high oil prices, which are highly correlated with other Qatari hydrocarbons prices such as LNG, will drive hydrocarbon GDP growth of 23 percent in 2012. Given the expectation of no oil price change in 2013 over 2012, production increases will be the main driver of growth. As there are no major new hydrocarbons projects scheduled for completion in 2013, growth is expected to be modest at 3.6 percent taking hydrocarbons GDP to QR465 billion.
In the non-hydrocarbon sector, QNB Group forecasts growth of 15.4 percent in 2012 and 8.9 percent in 2013, with the corresponding values of QR308 billion and QR333 billion.
The sectors with the highest contribution to non-hydrocarbon GDP are financial services, representing 26 percent in 2012, followed by government services and manufacturing, both with 22 percent.
QNB Group expects government services to grow by 37 percent in 2012 reaching QR67 billion, mainly due to salary increases for Qatari government employees.
Based on QNB Group’s baseline forecasts for 2012 and 2013, GDP per capita will be $112,929 and $114,340 respectively, which will rank Qatar as the richest country in the world.