Country Report Qatar October 2009

Outlook for 2010-11

• The emir will focus on economic issues and is unlikely to pursue any substantive domestic political reform during the forecast period.
• Qatar will continue to pursue an independent foreign policy and will maintain its high-profile role as a mediator in various regional conflicts. Balancing its conflicting relations with the US and Iran will remain a priority.
• Real GDP growth will surge to 24.5% in 2010, as three major new liquefied natural gas (LNG) projects come on stream, before slowing in 2011 to a still strong 10.2%.
• The official fiscal surplus (excluding most LNG revenue) will widen to QR36bn (US$9.9bn, or 8.3% of GDP) in 2010/11 and again to 10.3% in 2011/12. Were LNG included, the surplus would average 20.3% over the forecast period.
• Following deflation of 3.9% in 2009, driven by a fall in rents and commodity prices, consumer prices will rise again in 2010-11, with annual inflation averaging 3.7%.
• The current-account surplus will widen to a record US$19.4bn in 2010, and again to US$32.8bn in 2011 as hydrocarbon export volumes increase.

Monthly review

• MEED has reported that infrastructure projects worth US$5.5bn will be put out to tender in the coming months, including the New Doha International Airport, Sidra Hospital, the Qatar-Bahrain Causeway and the New Doha Port.
• Qatari Diar has announced that it is seeking to raise nearly US$1bn in Islamic financing to fund its international expansion into Asia and Latin America.
• The latest data from UNCTAD have shown that FDI flows into Qatar rose by 43% to US$6.7bn in 2008, one of the largest increases in the region.
• Qatar's third LNG "super-train", Qatargas II Train 5, came on stream on September 9th, bringing total capacity to 53.6m tonnes/year. However, Qatar may be producing below capacity because of the global LNG glut.
• Qatar Airways has secured US$700m in loans to purchase four new Boeing 777s as part of a wider plan to expand its fleet to 120 aircraft by 2010.
• Laffan Refinery, the first in Qatar to refine condensate, came on stream on September 23rd with a capacity to produce 146,000 barrels/day of naphtha, kerosene, gasoil and liquefied petroleum gas.
• Consumer prices have continued to fall, sliding by 0.3% and 0.8% month on month in July and August respectively, with much of the decline coming from lower rental costs.

Source: Country Report

This report covers the following industry codes:
SIC Code: 47;37;70
NAICS Code: 48;336;72