Minister of Finance H E Ali bin Ahmed Al Kuwari and Egyptian Minister of Finance H E Dr. Mohamed Ahmed Maait during the event.
Doha: The Qatari government has been very disciplined in its spending and has created the right policies to deal with adverse conditions, Minister of Finance H E Ali bin Ahmed Al Kuwari said yesterday.
In an interview during a session on ‘Diversifying for 21st Century Prosperity’ at the Qatar Economic Forum, Powered by Bloomberg, Minister Al Kuwari said that while the upcoming World Cup creates a pressure on the Qatari economy on the demand side, the country’s 4-5 percent inflationary rate is still considered competitive compared to other economies.
“We are seeing even other advanced economies with about 8 or 9 percent. For us, inflation is there, but also we have made so many strategies in the past that helped us weather these momentary pressures, like the food security program we have implemented years ago. Also our fiscal policies and medium-term fiscal policies. We have been very disciplined in our spending, in our approach. And we have created the right policies to deal with adverse conditions,” the Minister said.
He added that Qatar has been in a deflationary position in the last two to three years, while inflation in the country started from the middle of of 2021.
“Slowly it grew to 6 percent in December, on month-on-month, and the full year was 2.5 percent, which was manageable. This year it had relaxed to 4 percent, and then grew again to 4.7 percent. Food is around 3.5 percent. But the main driver for the growth in Qatar was the entertainment sector. And that’s understandable, because you had a lockdown for two years, and suddenly you had tourism is up, travelling, and again cinemas going back. This sector grew by 37 percent,” Minister Al Kuwari added.
He said Qatar is working on a very strict fiscal policy framework with different oil scenarios, regardless of surplus or deficit.
“It’s a very clear system. The surplus goes to the Qatar Investment Authority, Qatar Central Bank reserves, and debt payment. Regardless, if the oil is $120 or $40, at the end of the day, the fiscal policy remains. Our aim is sustainability,” he added.
Speaking about Qatar’s planned green bond issuance, Minister Al Kuwari reiterated the country’s support for green finance and commitment to ESG as well as the national strategy for climate change and environment. However, Qatar will go ahead with the issuance only at the right time, he said.
Speaking about other ESG initiatives, including the transition to renewables, Minister Al Kuwari stressed: “We have to be very realistic in our ESG plan and ambition, and not to put the pressure in the current situation. Energy prices were self-created by not investing on traditional fuel. Because we were not thinking about the transit, and were just thinking about the transformation. We have to be very realistic. We have to worry about the environment, and work on sustainability, but we also have to worry about the current generation, and have very realistic plans. The commitment for the green energy is there, we support it, and Qatar has national vision for transformation. But at the end of the day, we have to be very realistic in our goals,” he added. During the session, Minister Al Kuwari also highlighted the need to support struggling economies through foreign direct investments.
“Global crises will have to be tackled globally by all economies. And I really love the title of the conference ‘Equalizing Recovery’. It is everybody’s responsibility. We need to join hands together in putting the right policies, including international organisations like the International Monetary Fund, and World Bank. Everybody has to join so everybody will have an equalised recovery,” Minister Al Kuwari said.
Also, speaking during the session, Egyptian Minister of Finance H E Dr. Mohamed Ahmed Maait shed light on the impact of the ongoing global crises – COVID-19 pandemic, Russia’s invasion of Ukraine, China’s zero-COVID policy, and supply chain disruptions – to Egypt, a country of 104 million people.
Maait said the war in Ukraine has impacted Egypt’s external factors and food security, amid a 13 percent inflation year-on-year.
“Food security is not only about supplying quantities, but also ensuring affordable costs. We have to think about our people. Because there’s a limit that the public can carry on in the level of inflation,” he said.
He added that to ease pressure on over 30-40 million low income earners in the country, the Egyptian government has increased salaries, pensions, and subsidies on various economic sectors.
“The whole world is at a crossroad, and we see this accelerating. It will be more difficult for all of us. If we cannot quickly find a solution, we have to be ready to hear that some people started to die from starvation or out of inability to find hard currencies to buy medicines. It will not be just one nation or one region. It will be the whole world,” Maait said.
