Qatar's economic and financial situation
1. Economic performance over the last decade, driven by the
hydrocarbons sector
Qatar's economy still relies heavily on the hydrocarbon sector,
which accounted for 51% of GDP, 84% of exports and 70% of fiscal revenues in
2015. To date, Qatar holds the world's third largest conventional gas reserves.
(13.1% of world reserves) behind Iran (18.2%), a country with which Qatar shares
the North Field offshore gas field, and Russia (17.3%). Qatar is also the
largest producer (76.4 MT / yr or 31% of world production) and the world's
leading exporter of LNG (32% market share).
The high level of hydrocarbon prices since the mid-2000s has
allowed for rapid growth in Qatar's production and export capacity, supporting
the economy as a whole. Thus, GDP has more than doubled in barely a decade,
from 80 billion dollars in 2007 to 167 billion dollars in 2015. Growth has been
particularly strong over the period 2007-2011 (16.1% per year on average) ,
driven by both a volume effect (rapid increase in gas production, from 27
billion m3 in 2001 to 177 billion m3 in 2015) and a price effect (the price of
gas being indexed to that of oil).
This growth has had an impact on the standard of living of the
Qatari population, which today is one of the highest in the world (GDP per
capita of 132,870 USD in purchasing power parity in 2015). Inflation remains
under control (1.8% in 2015, 2.9% in 2016).
2. An economic diversification strategy
Since 2011, the authorities have initiated a proactive policy to
reduce the share of hydrocarbons in the economy (capping gas production,
gradually decreasing oil production), which has resulted in a slowdown in GDP
growth, estimated at 4.3% per year on average over the period 2012-2015. This
slowdown should continue over the 2016-2020 period (a forecast of 2.9%), since
the cap on gas production has been accompanied by a drop in hydrocarbon prices
since 2014.
This diversification policy is accompanied by considerable public
investment, in the order of USD 250 billion over the period 2010-2020 according
to the "Qatar National Vision 2030" plan. In fact, the investment
rate stood at 38.2% of GDP in 2015, compared with 27.8% in 2013.
Growth is now driven by non-hydrocarbon activities (+ 8.2% in
2015), notably through downstream petroleum, services (banking, aviation,
telecoms) [1], education and research.
Significant supply constraints remain, particularly with regard to
human resources. The country is largely dependent on a large foreign workforce
(90% of the total population).
3. An economic situation impacted by the recent fall in the price
of hydrocarbons
The drop in hydrocarbon prices, which began in 2014, weighed on
Qatar's economic performance. While the volume growth of GDP stood at 3.6% in
2015, it was reduced to 2.3% on average year-on-year over the first three
quarters of 2016 [2] (-10, 5% for nominal GDP). Exports shrank 25% on average
in 2016.
In this context, Qatar has been confronted since 2016 with an
unprecedented situation of "double deficit". The current account has
moved from the surplus (USD 50 bn or 24% of GDP in 2014 and USD 14 bn in 2015,
or 8.2% of GDP) to the deficit in 2016 according to the most recent estimates
(deficit of 6.2 USD bn in the first three quarters of 2016). The surplus
generated by the public accounts, for its part, would have been reduced from 14%
of GDP in 2014 to 1.2% of GDP in 2015, and would record a deficit of 8% in the
first three quarters of 2016. , 2% of GDP. The IMF is counting on a public
deficit of 7.6% of GDP and a current account deficit of 1.8% of GDP in 2016.
The Qatari government, which is planning an extension of the budget
deficit for the year 2017, is engaged in a rationalization of current
expenditure (target of -17.8% for the 2016 financial year, compared to 2015,
and -9 , 6% for fiscal year 2017) [3] and a refocusing of its public investment
program, now focused on infrastructure, in the perspective of the 2022 World
Cup Football, health and education, security and defense also being at the
heart of the Qatari government's concerns.
The expected increase in hydrocarbon prices in 2017, approaching US
$ 60 / barrel, and the maintenance of a high level of investment, are likely to
allow growth to pick up again (the IMF forecasts growth of 3.4 % in 2017).
4. A banking sector under control but requiring follow-up
From the beginning of the financial crisis of 2008, the Qatari
authorities have focused on strengthening bank balance sheets. Three types of
measures were gradually implemented (for an overall amount of USD 15 billion):
(i) strengthening the Qatari banks' own funds through the QIA sovereign fund,
(ii) the central bank's acquisition of the stock market portfolios and banks'
real estate loans, and (iii) conducting in-depth audits of banks, leading to
the establishment of prior authorization for any investment abroad and the formalization
of strict prudential ratios.
To date, commercial banks have an equity ratio of 15.6% on average,
higher than the regulator's requirements (the Central Bank requires a ratio of
12.5%), and the level of bad debts does not exceed 2%. gross loans.
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