Qatar Economic Report 2012 by Global Investment House

Qatar Economic Report –  Qatar continues to be one of the world largest growing economy, managing to report an 30.1% increase in nominal GDP and an estimated 16.6% growth in Real GDP for 2010. It benefits from its large natural gas reserves and oil reserves, which helped Qatar avoid reporting negative growth due to the financial crisis.

Qatar nominal GDP grew at a astonishing 20.2% on a CAGR basis during the period 2006-10, while real GDP reported a CAGR growth rate of 16.0% during the same period. Qatar GDP measured at real prices reached QAR283.9bn, while GDP measured at current prices reached QR463.0bn. Hence GDP per Capita reached USD74,206 in 2010, as compared to USD58,393 in 2009. Qatar GDP has been marching at a fast pace since 1999 as the economy utilizes its hydrocarbon sector. In 1999, Qatar GDP was QAR45.1bn, and has gone up by 927% since then.

The increase in GDP of Qatar in 2010 is driven by hydrocarbon sector which make up for more than half of the country’s GDP. Oil and Gas sector contribution to GDP reached QAR239.3bn in 2010, up 50.3% from 2009, this is due to the completion of major natural gas projects including LNG 6 and 7 trains which increased the capacity of LNG to 77mn tons and because of better oil prices which witnessed

Qatar Marine increasing 42.6% during 2010.  Oil & Gas sector maintain a 51.7% share of the GDP, the share increased from 44.8% enjoyed in 2009. However, Qatar is working on diversifying the GDP through various sectors including  industry, construction, and real estate.

Qatar Statistics

Source: QSA, OPEC, IMF

At a CAGR basis, Oil & Gas sector grew 19.5% during the period 2006-10. As per IMF estimates oil & gas sector is projected to grow 29.5% in 2011 as LNG production reached a climax of 77mtpa  and 3% in later years as Qatar there are less new projects related to the development of hydrocarbon projects until 2015.

Non oil & gas sector share of total GDP reached 48.3% in 2010, as compared to 55.2% in 2009. Non oil sector GDP reached all time high of QR223.7bn and grew on a CAGR basis of 21.1% during the period 2006-10.

Qatar have developed a strong 2030 Vision which stresses the diversification of the economy through the advantages derived from the oil & gas sector. With Qatar’s abundant hydrocarbon resources it will try to develop and secure higher standards of living. The Vision addresses four important pillars – human, social, economic, and environment development by

• 1-Modernization and preservation of tradition.

• 2-The needs of this generation and the needs of future generations.

• 3- Managed growth and uncontrolled expansion.

• 4- The size and the quality of expatriate labor force and the selected path of development.

• 5- promote economic growth, social development and environmental management.

Non oil sector is dominated by financial services which reached QAR62.1bn and witnessed a growth of 6.9% in 2010. The financial sector of Qatar has been supported strongly by the government. Qatari banks continue to benefit from strong macroeconomic fundamentals of the economy and the high level of domestic spending. Strong government support to the banking sector has ensured low risk for the banks.  Qatar has limited the exposure of risk to the bank, enhanced liquidity in the banks and strongly increased confidence and sentiment in the banking and financial markets. Thus the sector posted a 20.6% growth on a CAGR basis during the period 2006-10.

Second largest non oil & gas sector is the manufacturing sector. It makes up around 10.6% of the total GDP in 2010, reaching QR49.2bn. Manufacturing sector witnessed the largest increase among non-oil and gas sector as it increased by 46.5% in 2010, and witnessed a 24.3% increase on a CAGR basis during 2006-10, showing the efforts by the government to diversify the economy.  Next, is the services sector which increased 11.5% in 2010 reaching QAR35.8bn and maintaining a 7.7% share in the total GDP.

Trade, Restaurants and Hotels sector which hold a 7.0% share of the total GDP, grew 8.3% in 2010 to reach QAR32.3bn, On the other hand, building and construction sector was the only  sector which reported negative growth in 2010, decreasing 5.4% in 2010, this is the second consecutive year on  year decline for the sector. On the opposite side, credit to real estate increased 26.2% to reach QAR51.0bn and increasing at a CAGR of 37.7% during the period 2006-10.
 

Nominal GDP by Economic Activity

Source: Qatar Statistics Authority

Agriculture & fishing, electricity & water, and transports & communication, together they make up 4.5% of the total economy.

9M-2011

As per latest data available, Qatar nominal GDP reached QR459.8bn for the 9M-2011, up 36.4% from the same period a year ago.   Compared on a yearly basis, oil and gas sector increased 56.0% during the 9M-2011 period as compared to the same period a year ago. During the 9M-2011 oil and gas sector managed to account for 58.4% of the total GDP.  It’s worth mentioning that in 9M-2010, oil and gas sector contributed to 51.0% of the total GDP and this increase in 2011 is due to increasing hydrocarbon prices and increasing LNG capacity.

Qatar Nominal GDP by Economic Sector – 9M-2011

Source: Qatar Statistics Authority

 The largest non oil and gas sector of the economy which is financial services (11.1% share of 9M-2011 GDP) managed to increase by 11% to reach QR50.8bn as of 9M-2011. Manufacturing sector – the second largest sector comprising 10.3% of 9M-2011 GDP – witnessed a healthy 31.9% increase as compared to the same period a year ago.

Building and construction sector continued its slide and its expected to record a third year of negative growth in 2011, the sector decreased 4.1% during the 9M-2011 period as compared to the same period a year ago. Trade, restaurants & hotels and transports & communication witnessed declining growth from the 9M-2011 period by 26.4% and 19% respectively to reach QAR17.3bn and QAR11.0bn. On the other hand The services sector witnessed the largest growth in 9M-2011 by 73.4% to reach QAR45.1bn.

As per the IMF, Qatar is expected to report a 18.7% and 6.0% growth in real GDP for 2011 and 2012. Non oil & gas sectors are expected to grow 9% in 2011 driven by the growth in manufacturing and financial services sectors. In addition the oil & gas sector growth has peaked by to the completion of several major projects including the 77Mntpa LNG projects which made Qatar the largest exporter of LNG in the world. The 6% increase in real GDP in 2012 is due the single digit 3% growth for oil & gas sector in 2012 as Qatar reduces  any new projects for the sector and will be for developing other sectors and diversifying the GDP.

The report was produced by Global Investment House “Global”.