2013-10-23 08:29:34 - Fast Market Research recommends "Qatar Business Forecast Report Q4 2013" from Business Monitor International, now available
Qatar's short-term political risk profile remains one of the most stable in the region. Despite having 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 - 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/694768_qatar_business_forecast_report_q4_201 ..
Qatar's economic growth will be largely driven by the non-hydrocarbon sector over 2013 and 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 5.0% and 4.8% in 2013 and 2014 respectively, down from 6.2% in 2012 and a yearly average of 15.6% during 2007-11.
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.
Major Forecast Changes
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 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:
Major Forecast Changes
Chapter 1: Political Outlook
BMI Political Risk Ratings
New Ruler, Same Domestic Agenda
- Sheikh Tamim bin Hamad Al Thani became the new ruler of Qatar on June 25, 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.
TABLE: KEY NEW FIGURES
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.
TABLE: POLITICAL OVERVIEW
Chapter 2: Economic Outlook
BMI Economic Risk Ratings
Non-Hydrocarbon Sector Powering On
- We continue to see a strong economic performance in store for Qatar heading into 2014, with the non-hydrocarbon sector providing most of the growth momentum. We retain our real GDP growth forecasts of 5.0% for 2013 and 4.8% in 2014, down slightly from 6.2% in 2012.
TABLE: ECONOMIC ACTIVITY
TABLE: FISCAL POLICY
Record Fiscal Windfall Highlights Project Execution Difficulties
- Qatar's medium-term fiscal outlook remains largely positive, with latest data showing a record QAR99.2bn budget surplus in FY2012/13, equivalent to 14.2% of GDP. That said, the latest windfall also highlights the practical difficulties faced by the government in pushing through higher levels of capital expenditure, a factor that will remain a key downside risk to spending over the coming decade. We forecast the budget surplus to reach 9.7% of GDP in FY2013/14, declining to 9.4% in FY2014/15.
Inflation To Rise Further In 2014
- 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.
TABLE: MONETARY POLICY
Rapid Expansion To Continue
- Although the Qatari commercial banking sector has seen growth moderate since the beginning of 2013, we expect the government's expansionary fiscal plans, combined with new regulations imposed by the monetary authorities on lenders, to fuel credit growth over the coming quarters. We forecast asset and lending growth of 16.0% and 23.0% respectively in end-2013, moderating to 15.0% and 19.0% in 2014.
TABLE: BANKING SECTOR OVERVIEW
Chapter 3: 10-Year Forecast
The Qatar Economy To 2022
Solid Long-Term Growth Prospects
Full Table of Contents is available at:
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