A view of West Bay Doha.
Driven by a strong recovery and rising exports, Qatar’s economy is expected to grow significantly higher this year compared to last year. The real GDP (Gross Domestic Product) is likely to grow by 4.9 percent in 2022, according to a World Bank report released yesterday. Qatar’s real GDP is estimated to have grown by 3 percent in 2021.
“Real GDP is estimated to rise in 2022 to 4.9 percent on the heels of boosted hydrocarbon exports of 10 percent,” said the World Bank about Qatar in its ‘GCC Economic Update- April 2022’. “Economic recovery is well underway and, despite temporary interruptions from COVID-19, real GDP grew by 3 percent in 2021, versus a 3.6 percent contraction the previous year, rebounding in the second quarter of 2021 at an annualized rate of 4 percent and remaining positive in the third quarter,” it added.
In Qatar, the Purchasing Managers’ Index (PMI) stayed above 50 for all of 2021, reflecting economic expansion that reached a highpoint of 63 in November and has been above 57 ever since. Google mobility data experienced a short-lived dip during the most recent surge of the virus, but retail and recreation, and transit station and workplace mobility, recovered in February 2022 to pre-pandemic levels.
According to the World Bank, the effects of the war in Ukraine on the commodity markets and of its associated economic sanctions are positive, on balance, for Qatar’s economy, the largest exporter of Liquid Natural Gas (LNG) in the world.
Preparations for the soccer World Cup, scheduled for November-December 2022, have intensified diversification of the country’s economy and bolstered non-oil activity despite the COVID-19 pandemic. Overall, however, Qatar’s hydrocarbon dependence is likely to expand this decade, as its North Field facilities begin production.
The possibility of new outbreaks of COVID-19, a spike in consumer price inflation, and rising US interest rates are likely to be modest downside risks given Qatar’s high vaccination rates and sizeable sovereign financial wealth and reserves.
About the regional growth the World Bank said that in Gulf Cooperation Council countries, buoyed by the increase in oil prices, GDP per capita is projected to grow by 4.5 percent in 2022, but will not recover to pre-pandemic levels until
2023.
Economies in the Middle East and North Africa (MENA) region are expected to grow by 5.2 percent in 2022, the fastest rate since 2016, on the back of oil-price windfalls benefitting the region’s oil exporters. But heightened uncertainty surrounds this forecast due to the war in Ukraine and ongoing threats from COVID-19 variants.
In contrast, in 2022, GDP per capita of middle-income oil exporters is projected to grow by 3 percent, and by 2.4 percent for the region’s oil importers, both barely lifting living standards above pre-pandemic levels. Overall, if these forecasts materialize, 11 out of 17 economies in MENA may not recover to pre-pandemic levels by end of 2022.
