File Photo: Abdul Basit © The Peninsula
Doha: Qatar’s economy is likely to witness strong recovery next year as International Monetary Fund (IMF) has projected Qatar’s GDP growth of 2.7 percent in 2021.
“A gradual recovery—with real GDP growth projected at 2.7 percent in 2021—will be supported by increasing gas production and the rebound in domestic demand. Risks to the outlook are mainly driven by the global outlook and titled to the downside,” said IMF in a statement, yesterday.
An IMF team, led by Mercedes Vera-Martin, held virtual meetings from December 6-14, 2020, to discuss recent economic and financial developments and outlook.
“The swift response in implementing containment measures helped limit the health impact of the Covid-19 pandemic. The authorities’ swift response —with strict prevention and containment measures and one of the highest per-capita testing rates in the world— allowed the country to resume all economic activities since September. Qatar has also provided medical and financial pandemic relief to many other countries around the world,” said Vera-Martin in a statement.
According to IMF risks to the outlook are mainly driven by the global outlook and titled to the downside. They stem from uncertainty about the global growth recovery, success and speed of vaccination and pandemic resolution, and oil prices, whose outlook depends on the global recovery. Upside risks to the outlook arise from a successful resolution of the regional diplomatic rift and a stronger-than-envisaged global growth rebound.
“According to latest financial soundness indicators, the banking sector remains wellcapitalized and liquid. While the moratorium on loan repayments provides an opportunity for banks and businesses to adjust to the new environment, the continued proactive monitoring of credit portfolio risks will support banks’ role in the economic 3 recovery. We welcome the continued cooperation across financial sector regulators to strengthen the regulatory and supervisory frameworks,” said IMF.
The IMF has welcomed steps taken by Qatar in the field of labour reforms and other fields.
“The ambitious structural reform agenda underpins Qatar’s economic diversification efforts to enhance long-term potential growth. The abolishment of the Kafala sponsorship system and strengthening labor protection are welcomed steps in facilitating labor mobility and spur productivity. These measures along with the new real estate and public-private partnerships (PPP) laws should help Qatar to improve its competitiveness,” said IMF.
Reforms towards strengthening minority investors’ protection, contract enforcement, and insolvency resolution will further improve Qatar’s business environment, mobilize foreign direct investment, and support economic diversification.
