Doha, Qatar: Qatar’s short-term household spending is anticipated to be broadly positive and forecast an increase of 1.9 percent year on year in 2023, stated Fitch Solutions in its recent report.
However, the data also reveals that next year, consumer spending will be growing by 2.1 percent, but a deceleration of 8.0 percent annual growth in 2022 as the low base effects from the Covid-19 pandemic dissipate.
“Rising interest rates in response to high inflation will weigh on consumer spending 2023 before improving in 2024,” the report stated adding that, household spending growth will remain robust due to the high incomes of Qatari consumers.
Fitch Solutions underscored the country’s economy, which will see a significant boost of almost 2.3 percent in 2023 following a resilient growth of 4.9 percent last year due to major sporting events like the World Cup and the near record high oil prices during the first half of 2022.
It further noted that “Both the hydrocarbon sector and the tourism sectors are important pillars of the Qatari economy, and the recovery of both sectors will aid disposable income growth.”
“Oil is a key source of government revenue in Qatar and therefore dictates the state budget and fiscal policy, while also determining to what extent the government is able to afford high employment levels in the public sector, the report added.
Analysts in the oil and gas industry are forecasting Brent crude to average USD80/bbl in 2023, down from an average of USD99/bbl in 2022.
Palpably, this will keep revenues supported even as the Q4 2022 decision by OPEC+ to limit oil production in 2023 will weigh on export revenues.
Tourism experts, on the other hand, expect that Qatar will continue to see a vital increase beyond 2023, following a full recovery in arrivals in 2022 supported by many elements including the FIFA World Cup, ease of GCC sanctions on Qatar, and natural unlocking of pent-up demand across the region.
