Qatar, the world’s biggest liquefied natural gas exporter, has raised its forecasts for economic growth this year and in 2013 as non-energy industries expand.
The nation’s real gross domestic product will increase 6.3 percent in 2012, compared with a previous forecast of 6.2 percent, while economic growth in 2013 may rise to 4.8 percent compared with an estimate of 4.5 percent in June, the General Secretariat for Development Planning said in a statement today.
Half of Qatar’s economy will be based on petroleum production next year, the government said. The country’s economic growth was the fastest in the world in 2011 and 2010, according to the International Monetary Fund. The expansion was driven by the completion of 14 gas liquefaction plants, raising exports of the fuel. No further plants are planned amid a moratorium on development of the North Field, the world’s largest gas reservoir.
Construction will pick up as infrastructure projects begin to take effect after delays “and we are also expecting growth in high value-added services such as financial services, transportation and communication,” Frank Harrigan, director of the department of economic development at the planning body, told reporters today. “All of the growth will come from non-oil and gas” until about 2015, when a natural gas project called Barzan begins operation, he said.
Qatar’s economic expansion is based on “robust” growth in the non-oil and gas industries, the government body said. The government forecasts 9.3 percent expansion in those industries this year, and 9.6 percent in 2013. The government revised its 2012 nominal GDP, which reflects the cost of oil, to 14.7 percent from 11.2 percent amid higher-than-forecast crude prices. The country’s 2012 fiscal surplus is estimated at 7.9 percent of GDP, and 5.3 percent of GDP in 2013, the planners said.
Qatar, which is hosting the 2022 soccer World Cup, plans to spend $138 billion on infrastructure from 2011 to 2016, greater than 10 percent of GDP through 2016, the government said today. The spending amounts to a 42 percent increase from what was projected by the planners in 2010. The country is building a $35 billion rail and metro network, new highways, sports stadiums, an international port and an international airport.
The planning department reported “challenges to ensuring delivery” of infrastructure projects amid rising costs and planning delays caused by the large volume of projects during the next decade.
Risks to economic expansion are “mainly external” including the debt crises afflicting countries in the euro area and “geopolitical developments” that threaten shipping of oil and gas, the government said. At the start of this year, Iran threatened to shut the Strait of Hormuz, through which Qatar exports all its gas. The planners warn that “demand and supply” fundamentals suggest “downside risks” for oil prices.
Still, Qatar’s exposure to the euro-area crisis is “limited and contained,” Harrigan said. Crude oil would have to fall below $50 per barrel “to shift the projected fiscal surplus for 2013 to deficit,” the planners said in the report.
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