Recently released figures show some
gains in Qatar’s projected GDP during the third quarter of 2016 — an estimated
3.7 percent year-over-year growth.
Officials estimate that, factoring
in constant prices, the country’s gross domestic product rose 3.6 percent from
second-quarter figures.
Splitting the economy into a
“hydrocarbon” segment and “non-hydrocarbon” growth, Qatar’s Ministry of
Development Planning and Statistics showed growth or expansion of 2.7 percent
in hydrocarbons, or the traditional oil sector, and 4.7 percent outside the oil
market. That translates to 3.2 percent growth in the hydrocarbon segment GDP
and 4.1 percent growth in non-hydrocarbons.
In terms of how Qatar is
diversifying its economy, officials pointed to sectors like construction,
retail, financial and insurance, and manufacturing.
For more input on these financial
numbers, the Gulf News Journal spoke with Meenal Bhanushali, a senior research analyst
at the global research firm Aranca. She has researched equity markets in the Middle
East for leading buy- and sell-side research firms, including researching
several sectors and tracking macroeconomic developments.
“We believe the early signs of
uptick in the country’s GDP growth is supported by oil prices recovering and
the non-hydrocarbon segment continuing growth,” Bhanushali said.
Better oil outlooks will continue to
help, she said.
“A more stable oil and gas pricing
environment will help Qatar’s economy to witness an upturn in growth going
forward, and help the Qatar government soften the impact of its first budget
deficit in 15 years,” Bhanushali said, citing World Bank statistics.
Looking at Qatar’s journey,
Bhanushali described a process by which GCC nations are finally untethering from
oil, at least to some extent.
“Historically, over 50 percent of
government revenue has been sourced from the hydrocarbon sector,” she said.
She said that following the recent big
changes in oil prices, which shook global markets, Qatar adopted a
diversification strategy that focuses on non-hydrocarbons. It now appears to be
relying partly on spending to boost sectors that will need to contribute to the
country’s economic engines in the future.
“The government has rationalized its
spending,” Bhanushali said, citing projects like the 2022 FIFA World Cup and
ongoing investment in both the health care and education sectors. “We expect
the spending to aid non-hydrocarbon segment expansion and reduce dependency on
hydrocarbons in the long run.”
Other analysts see potentially
diverse economic outlooks and outcomes for Qatar. In an article last April, Forbes
writer Dominic Dudley suggested that the nation could see a “credit crunch,”
while also pointing out other challenges, such as Qatar’s labor record.
However, citing the FIFA project and others, Dudley suggested that parts of the
Qatar oil economy are built on a firm foundation.
“In its favor, it’s worth noting
that the Qatar economy has proven more resilient than those of most of its
neighbors,” Dudley wrote. “The country has the advantage of having the world’s
largest natural gas field, the North Field … and the fact that international
gas sales are typically arranged through long-term contracts. That means the
country isn’t as susceptible to the volatility in oil prices that Saudi Arabia,
the UAE, and others have to deal with.”
