2014-01-04 05:14:14 - Recently published research from Business Monitor International, "Qatar Business Forecast Report Q1 2014", is now available at Fast Market Research
Qatar's short-term political risk profile remains among the most stable in the region. Despite enjoying little in the way of democratic freedom, Qataris benefit from massive hydrocarbon wealth which is spread generously across the country's native population and enjoy the highest per capita GDP in the world. A small population - and one without much inclination to protest against the government - will keep the country insulated from large-scale public unrest in the immediate term.
Sheikh Tamim bin Hamad Al Thani became the new ruler of Qatar in June 2013, in a peaceful handover from his father, Sheikh Hamad bin Khalifa. The 33-year-old Emir's first public address and the composition of his new cabinet suggest that policy continuity will be the
order of the day, in line with our view.
Full Report Details at
- www.fastmr.com/prod/759041_qatar_business_forecast_report_q1_201 ..
Qatar's economic growth will be largely driven by the non-hydrocarbon sector over 2014, with expanding domestic consumption and progress on infrastructure investments fuelling economic activity. However, weaker performance in the hydrocarbon sector will drag down overall growth, and we expect Qatar's real GDP to expand by 5.4% in 2014, down from 6.2% in 2012 and an estimated 5.7% in 2013.
We project average consumer price inflation in Qatar to rise to 4.0% in 2014, up from 1.9% in 2012 and our forecast of 3.5% for 2013. Rising rental rates will continue to constitute the main inflationary force, on the back of a sharply growing population and an undersupply of affordable housing.
Key Risks To Outlook
Given the economy's heavy reliance on the hydrocarbon sector, a pronounced global economic downturn - if it were to translate into a sustained drop-off in demand for oil and gas - could impact negatively on our forecasts for Qatar's external account position, budget and growth outlook. That said, we highlight that the country's US$115bn sovereign wealth fund - as well as its continuing ability to tap into international debt markets - provides the economy with significant bulwarks against these risks.
The Qatari government's increasingly assertive foreign policy raises some risks in relation to the outlook for regional political stability. In particular, we highlight the potential for the country's foreign policy to provoke a backlash in the region and the danger that the government could become bogged down in a drawn-out conflict in the Middle East.
Partial Table of Contents:
Key risks to outlook
chapter 1: political outlook
BMi political risk ratings
'Brand Qatar' Facing its First crisis
- Qatar has faced international opprobrium over the last few months, as the spotlight has turned towards its problematic sponsorship ('kafala') system and the poor labour conditions faced by migrant workers. We warn that any permanent damage to the country's reputation could undermine the regime's ambitions to present the country as a regional hub of culture and education, and thus have tangible economic implications.
TABLE: POLITICAL OVERVIEW
Long- term political outlook
Limited challenges For the coming Decade
- We find it hard to argue that political instability could become a core scenario in Qatar. Nevertheless, with the government playing the role of conflict mediator in one of the hottest international conflict flashpoints in the world, in addition to having a growing young population and increasing number of expatriates, Qatar will not be immune to external and internal shocks in the long run.
chapter 2: economic outlook
BMi economic risk ratings
non-Hydrocarbon economy to Maintain rapid Growth
- Qatari economic activity will continue to expand at a strong pace throughout 2014, driven primarily by growth in the non-oil sector. We forecast real GDP growth of 5.4% in 2014, from an estimated 5.7% in 2013 ( up from our previous projections of 4.8% and 5.0%).
taBle: econoMic actiVity
Population Growth To Continue Fuelling Rental Inflation
- We retain our view that Qatar's annual consumer price inflation will trend higher over 2014, averaging 4.0% from an estimated 3.5% in 2013. Rising rental rates will remain the main drive of inflation over the medium term. 17
taBle: M onetary P olicy
expanding on all Fronts
- We see healthy growth in store for the Qatari commercial banking sector over 2014, and forecast asset growth of 15.0% by the end of the year. Although newly approved regulations aimed at tightening control over state-owned companies' borrowing activity could lead to slightly lower lending growth going forward, we expect financing opportunities to remain extensive over the medium term , on the back of infrastructure-related activities .
TABLE: BANKING SECTOR OVERVIEW
regional analysis: G cc
Gcc: Key themes For 2014
- We retain a generally positive view of the GCC's prospects as we head into 2014. While headline growth should slow on account mainly of smaller gains in oil production, the expansion of the non-oil private sector will remain robust. We highlight several themes that will define the region over the coming year, including declining fiscal surpluses; rising rental inflation; continuing diversification; limited increases to private sector employment; and political risks linked to succession issues and sectarianism.
islamic Banking: continued Growth, But signs of a slowdown
Full Table of Contents is available at:
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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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