Country Report Qatar February 2009

Outlook for 2009-10

• The emir, Sheikh Hamad bin Khalifa al-Thani, will continue to focus on foreign policy challenges and opportunities to boost Qatar's prestige through its mediation efforts. Domestic political reform will not be a priority.
• Qatar will maintain an independent foreign policy, but it will broadly align itself with the rest of the Gulf Co-operation Council (GCC) with regard to relations with Iran.
• Qatar will continue to pursue its economic diversification strategy, although the bulk of foreign investment over the outlook period will be directed into the oil and gas sectors.
• Real GDP growth will average 16.1% in 2009-10, as substantial new liquefied natural gas and petrochemicals projects come on stream, although nominal GDP growth will be more sluggish owing to falls in oil and gas prices.
• We estimate that inflation averaged 15.1% in 2008, and forecast that it will ease to 9.2% in 2009 and to 8.1% in 2010, as global commodity prices fall substantially and new housing stock becomes available.
• The current account will record a small surplus of US$2.3bn in 2009, before widening substantially to around US$20.5bn in 2010 as energy prices rise and gas export volumes surge.

Monthly review

• Qatar has sought French and US support for a new push to catalyse a Palestinian unity government in the aftermath of the Israeli assault on Gaza. Qatar has also pledged US$250m towards reconstruction in Gaza.
• Sheikh Hamad participated in a reconciliation meeting at the sidelines of an Arab summit in Kuwait, initiated by King Abdullah of Saudi Arabia, to address divisions between the Arab countries most engaged with Palestinians.
• Qatar Real Estate Investment Company and Barwa Real Estate have merged, the third such merger since November intended to strengthen government-owned or part-owned firms during the global economic downturn.
• Qatargas II has sent its first tanker of liquefied natural gas (LNG) to the UK, a year later than originally scheduled owing to delays in the commissioning of Qatar's first 7.8m-tonnes/year LNG supertrain.
• Construction work on the giant Qatar-Bahrain Causeway has been delayed until the summer owing to a change in design, including adding rail tracks, which will increase the cost by around half, and the global credit crunch.
• The IMF's latest Article IV report has confirmed existing estimates of strong performance in both hydrocarbons and other sectors of Qatar's economy.

This report covers the following industry codes:
SIC Code: 15
NAICS Code: 23