Doha: The Ministry of Development Planning and Statistics (MDPS) released today the update to the Qatar Economic Outlook 2015–2017. The update foresees growth in the non-oil and gas economy, but anticipates that the expansion will moderate as project activity plateaus, population growth tapers and the government looks to improve the efficiency of public spending and to find savings on that spending.
The forecast of real GDP growth in 2015 is put at 3.7%. The dip from 2014, when real GDP growth was 4.1%, is due to the contraction in the hydrocarbon sector, due to falling oil production and shutdowns for operations and maintenance.
Fewer interruptions to supply are expected in 2016, and Barzan production will come on stream, lifting overall GDP growth to 4.3%. The non-oil and gas sector will begin to drift lower taking GDP growth in 2017 to 3.9%.
The Minister of Development Planning and Statistics H E Dr Saleh Al Nabit commented that "capital spending programmes will continue to support demand, but as project activity intensifies, its rate of growth will naturally slow, and with it the overall rate of expansion of the non-oil and gas economy.”
Dr Saleh went on to note that while the population is continuing to grow, he expects that the expansion will slow over the outlook period.
With global commodity and manufactured goods prices weakening, US dollar strength continuing and growth in the non-oil and gas economy softening, the update sees little inflation on the horizon. It anticipates that annual average consumer price inflation of 1.5% in 2015 will hold steady through 2016. An uptick might occur in 2017, but this will depend more on a recovery of demand in the global economy than on domestic economic conditions.
A small fiscal surplus is projected in 2015, but modest deficits may be seen in 2016 and 2017. Dr Saleh emphasised that, "means to rationalize spending are being accelerated and that new sources of revenue to support the budget are being considered".
The Minister also explained that while Qatar has not witnessed a budget deficit for 15 years, the state has ample means to finance it and that adjustments are now being considered that would build on Qatar's solid financial position to help more firmly anchor its long-term fiscal sustainability.
QNA
