Qatar’s Economy to Accelerate 2.7% in 2019

27 Feb 2019   |  Qatar

Qatar’s economy is expected to experience a robust growth and likely to be the highest in the region, positioning Qatar as one of the fastest-growing markets in the region and the world. IMF’s economic and financial indicators on its latest report recorded Qatar’s real gross domestic product (GDP) is predicted to accelerate from 2.6% in 2018 to 2.7% in 2019, with both contribution from hydrocarbon and non-hydrocarbon sectors. Qatar’s total revenue is expected to rise to USD 28.9 billion and USD 31.5 billion in 2018 and 2019 respectively.

The fast-growing Infrastructure Market

According to Regional Infrastructure Index (RRI) in the Middle East and North Africa (MENA), Qatar remains the number one ranked infrastructure market in the region. The report stated that Qatar has strong construction industry growth, stable political system and open business environment which facilitates international construction company to operate in the country.

Infrastructure has been one of the fastest-growing sector in Qatar, with the government planning to spend more than USD 200 billion as a part of a major infrastructure investment scheme. Growth in infrastructure sector is still largely driven by public expenditure rather than funding from public-private partnerships. The development contracts are on the hands of Central Tenders Committee (CTC), Ashghal, Qatar General Electricity and Water Corporation (Kahramaa) and Qatar Foundation.

The upcoming international events like The 2020 FIFA World Cup is also contributing to drive investment in the sector. SAK Holding reported that the total volume of projects prior to the events is estimated to be more than QR 728 billion, or equivalent to 121% of Qatar’s GDP in 2017. Qatar plans to increase residential and office space by around 50% and 40% respectively in the next three years. Most of the buildings will be built in Lusail City, that is being developed by Qatari Diar real Estate Company.

Upcoming strong growth in IT market

Information and technology (IT) market in Qatar is expected to grow at 10.8% CAGR during the period 2017-2021 according to Research and Markets report. Major drivers in the IT market are IT consolidations and modernization to improve the operational efficiency and achieve economies of scale. Minister of Transport and Communications, H E Jassim bin Saif Al Sulaiti, stated that Qatar’s ICT market is expected to grow by 2.3% per annum to reach USD 4.4 billion in 2021 from USD 3.9 billion in 2017.

Digital transformation is seen as one of the catalysts of country’s economic growth, as Ooredoo, international telecommunications company headquartered in Doha, made extensive contributions to the development of ICT in Qatar. The company achieved several milestones, including the launch of world’s first commercial 5G network. Ooredoo’s fibre network offers customers high-speed internet access of up to 10Gbps, marks the world’s highest speed and only available in 10 countries worldwide.

Several Smart Cities solutions at The Pearl, Doha, followed with innovative, life-changing technologies, including driverless aerial taxi, connected yacht, 5G services in moving vehicles and an 8K virtual reality experience. The company teste the world’s first self-driving 5G connected aerial taxi at The Pearl Qatar last September. The vehicle is capable to transport maximum two people to destination with 130 km per hour speed above traffic and other time-consuming obstacles.

Another trend is blockchain technology adoption in the country’s IT market. The future of blockchain in Qatar not only lie in the banking and finance sectors but also in supply chain-intensive industries. In the case of liquefied natural gas (LNG) industry, the use of blockchain could help prevent illegal manipulation, systems tampering and other cybercrime activities.

Read Other Insights
qatar bank assets increased
QCB: Qatar Bank’s Assets Increased by 12.1% YOY

By the end of January 2020, the volume of commercial banks assets and also liabilities reached QR 1560.8 billion, an increase of QR5.8bn from December 2019 and 12.1% on year-on-year.

Qatar's 2020: budget heavy spending on infrastructure projects
Qatar’s 2020 Budget: Heavy Spending on Infrastructure Projects

Qatar’s 2020 budget was recorded as the state’s biggest budget in five fiscal years, following the heavy spending on mega infrastructure projects.

qatar’s economy to accelerate 2.7% in 2019
Qatar’s Economy to Accelerate 2.7% in 2019

Qatar’s economy is expected to experience robust growth and likely to be the highest in the region, positioning Qatar as one of the fastest-growing markets in the region and the world.