EIU lowers growth forecast for Qatar
Posted on 23 April 2009 with 1 comment from readers
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It latest report on the oil and gas rich peninsula in the Persian Gulf points to an 80 per cent hike in gas production from 2009-10 as six new super-trains come on stream, supporting GDP growth at a time when other oil states are going to be hit by an expected 50 per cent fall in oil revenues.
Inflation falling
But there is some good news coming in the form of lower inflation. Qatar has seen its cost of living, particularly accommodation, rocket with inflation of 15.1 per cent in 2008 the highest on record. At the end of the first quarter inflation was down to 13.2 per cent as the economy cooled.
The EIU also notes that Qatar has a solid accumulation of financial reserves and steady expected income from gas exports that will shield the tiny country from the global recession.
However, the current account surplus is set to fall to 2.5 per cent of GDP in 2009, the lowest in a decade. By 2010, all the same, this will balloon to 17.6 per cent thanks to a surge in LNG exports to 72 million tones.
Diversification
There is also praise for the country’s economic diversification strategy from the EIU. It cites a series of major infrastructure projects, including the causeway to Bahrain that critically do not depend on finance raised in global markets.
Other policy shifts on the horizon are a cut in corporation tax from 35 to 10 per cent to encourage business start-ups, a streamlined licensing system and a single regulatory framework for the financial system.
It is therefore easy to conclude that Qatar has probably been the country in the world least affected by the global economic crisis, and will be the first to overcome its challenges.
STOP PRESS: A year later and the Qatar economic miracle is in some trouble, click here.
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Qatar real estate is taking is hard, however, as Emirates 24/7 reports:
Real estate prices in Qatar have retreated by 40 per cent to 70 per cent from their levels before the outbreak of the financial crisis in September 2008, said a recent survey.
A state of stagnation and anticipation prevails, the survey showed.
The survey, conducted by Aswaq.net of Al Arabiya television using price data supplied by a number of real estate brokers, said the price of land allocated for construction of villas in Doha went down by some 50 per cent while prices of villa land outside the capital dropped by 65 per cent to 70 per cent. Villa prices are down by almost 35 per cent. A villa of 400 sqm inside Doha is now sold for QR2 million (Dh2.01m) from QR3m.
Brokers told Aswaq.net Qatar’s real estate market is witnessing an unprecedented state of stagnation, eight months after the outbreak of the global financial crisis.