Country Report Qatar May 2009

Outlook for 2009-10

• The emir, Sheikh Hamad bin Khalifa al-Thani, will focus on calming economic concerns stemming from the global turmoil and boosting 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.
• Real GDP growth will fall to 9.6% in 2009 but surge to 23.5% in 2010, as new liquefied natural gas (LNG) projects come on stream, although nominal GDP will decline by 23.6% in 2009 owing to lower oil and gas prices.
• The official fiscal balance (excluding most LNG revenue) will record a deficit of QR6bn (2% of GDP) in 2009/10 and a surplus of 2.8% in 2010/11. Were LNG included, there would be a surplus in both years, averaging 11.5%.
• Following a dramatic surge in consumer prices in 2008, by an average of 15.1%, we forecast that there will be deflation averaging 2.8% in 2009, driven by falling rents and commodity prices, and then a bounce back to 5.2% inflation in 2010.
• The current account will record a small surplus of US$647m in 2009. This will widen substantially to around US$19.7bn in 2010 as energy prices rise and gas export volumes surge.

Monthly review

• The health and education ministers, the only women in the cabinet, have both been replaced in a reshuffle. Separately, the business and trade minister was killed in a car crash on May 1st.
• Qatar held a meeting in Doha for five small Darfuri rebel splinter groups and, in a related mediation initiative, brokered an agreement between Sudan and Chad, who have both been accused of arming each other's rebels group.
• Bids are being received for a licence to partly compete with the state-owned taxi operator. Qatar is also planning to find a private operator for Doha Port.
• Qatar's consumer price index fell by almost 10% in the first quarter of 2009, and by 2.4% compared with the same quarter of 2008, driven largely by falling rents.
• The 1.5bn cu ft/day Barzan gas project has been postponed indefinitely.
• A US$3bn government bond issue at 350 and 387.5 basis points over Libor, was oversubscribed by 300%. Separately, the IPO for Vodafone Qatar has raised QR3.4bn (US$928m), from individual and institutional Qatari investors.

Source: Country Report

This report covers the following industry codes:
SIC Code: 1;60;47
NAICS Code: 11;52;48