Qatar world's fastest growing economy in 2009
Posted on 12 March 2009 with no comments from readers
Despite the falling price of oil Qatar is still on track to be the world’s fastest growing economy in 2009, according to the latest IMF review.
Production of LNG and gas products is expected to double with the commissioning of two LNG trains and, together with the continued expansion of construction, manufacturing, financial services and ancillary services, this will deliver 29 per cent growth in real GDP.
Last year surging oil and gas prices sent Qatari GDP 44 per cent higher to $101 billion, even after a 23 per cent contraction in the fourth quarter as oil prices plunged 55 per cent.
LNG prices stable
LNG by contrast benefits from long-term supply contracts so prices do not fluctuate wildly and that assists in the huge financing requirements of these multi-billion dollar projects.
But the Qatari GDP growth is not new news to the Persian Gulf. Its systematic exploitation of the third largest gas reserves after Russia and Iran has delivered the highest growth rates in the Arab world through the past seven years of the oil boom.
However, the tiny Gulf state must be eyeing the mounting recession in the UK and USA, its too key markets for future gas exports, with some concern. It could yet be that energy demand in these markets does not grow as projected and that less gas is required than anticipated by planners.
Global clients
On the other hand, in an energy hungry world Qatar is likely to find plenty of clients for this clean and efficient fuel source. Investment continues unaffected by this year’s sudden slump in global trade and the IMF declaration of the Greater Recession.
Qatar Petroleum will invest $60 billion in oil and gas projects from 2008-2012 and oil output should rise from 860,000 bpd to 1m bpd by the end of 2010. And $45 billion will be spent on refining and gas-to-liquids projects and natural gas development.
The main downside for Qatar has been a hike in the cost of living and 16 per cent local inflation last year. However, declining international prices for goods and services are expected to moderate inflation to 10 per cent this year, says the IMF. Qatar is understandably the envy of the region.
