Qatar Infrastructure Report 2008

The State of Qatar is one of the wealthiest nations in West Asia and currently boasts the highest per capita level of GDP in the world. The prosperity enjoyed by the country can largely be attributed to oil and gas production, which constitute over 60% of Qatar's GDP. As is evident, Qatar is heavily dependent on the production of oil. The country's GDP grew at a rate of 7.1% year-on-year (y-o-y) and was estimated at US$30.76bn in 2006. The construction sector has perhaps been benefited the most by Qatar's recent economic boom, and BMI forecasts that the construction industry in the country will grow at a robust annual average rate of 14.5% during 2008-2012.

Hydrocarbon exports - which contribute over 60% to GDP and 70% to the government's revenues - are the mainstay of the Qatari economy. The government plans to invest US$70bn in the oil and gas industry during the next five years to maintain its revenue stream from the sector. In 2006, Qatar became the world's largest exporter of liquefied natural gas (LNG). The country has also been trying to develop its other sectors to ensure balanced long-term growth. Infrastructure development, banking, insurance and telecommunications services are among the key areas of focus in this plan. Major construction projects in the offing in Qatar include the US$5.5bn construction and development of the New Doha International Airport; a US$5.5bn port at Mesaieed; the 2,600 megawatt (MW) power plant at Ras Laffan, as well as extensive road network development and commercial construction.

The most severe problem being faced by the country is that of inflation, which stood at 11.8% in 2006 and is estimated to be around 10% in 2007. The construction boom which Qatar has witnessed during the past few years has further pushed up the prices of construction materials. Also, the labour force in the country largely comprises immigrants - implying that remittances flowing out from the country are high. Qatar's economy is highly dependent on oil production and the high dependency on oil and gas makes it very vulnerable to changes in oil prices in the international market. However, the government's efforts to suitably diversify the economy should allow the country to ward off any unfavourable development on this front.

The State of Qatar is expected to witness robust real GDP growth rates of 9.5% and 12.3% in 2008 and 2009, respectively. BMI forecasts the Qatari construction sector is likely to increase its share in the GDP to 10.5% and reach a value of near QAR33bn (US$9.06bn) by 2012.