Speaking at an event held by Carnegie Mellon University in Qatar on the progress of the economy in the past 20 years, he said that despite reliance on oil, the country aims to move towards a knowledge-based economy. Numbers show that Qatar has succeeded in establishing strong growth over the past 20 years. Back in 1995, Qatar’s GDP was around USD 8 billion. It had grown to USD 162 bn in 2005 and by 2014, it grew 26 times compared to 1995.
The minister said one of the main challenges facing the Qatari economy is maintains its LNG global market share. Currently, Qatar supplies the world with 30 percent of its energy needs abd at the current pace, Qatar’s LNG resources would run out in 140 years.
Budget and investments
As for the budget, Al Emadi noted that it was at USD 4 bn back in 1995 and grew to USD 300 bn last year. He said that international events, particularly the FIFA World Cup 2022, requires investments worth USD 200 bn from 2014-2022. That means the country needs to spend USD 500 million every week until 2022. Stating Qatar has never had a budget deficit over the past 15 years, he said the decline in oil prices will change that. “Despite this, the deficit will not represent a problem to Qatar’s ability to finish its infrastructure projects, which will end in 2024,” he said.
In terms of foreign reserves, Qatar’s reserves in 1995 were less than USD 500 mn but have grown to USD 157 bn. There are also reserves available to Qatar Investment Authority that has not been announced. Additionally, Qatar has an `AA’ rating from Fitch, which reflects a very strong credit position.
Meanwhile, a Qatar National Bank (QNB) report has said the country well-positioned to withstand lower oil prices thanks to its strong macroeconomic fundamentals, including relatively low fiscal breakeven price, the accumulation of significant savings from the past and low levels of public debt.
Real GDP growth is expected to accelerate from 4 percent in 2014 to 4.7 percent in 2015 and 6.4 percent in both 2016 and 2017 as the government expands its investment spending programme in the non-hydrocarbon sector.
Inflation is expected to remain subdued in 2015 as international food prices continue to fall due to slowing demand growth and the build-up in stocks after good global harvests Domestic inflation is also expected to remain weak in 2015, despite strong population growth, as additional housing units are lowering housing inflation Overall inflation is projected to pick up in 2016 and 2017 owing to the expected recovery in food prices in 2016 and higher oil prices in 2017.
Hydrocarbon revenues are expected to decline with lower crude oil prices and production, but this will be partly offset by higher non-hydrocarbon revenues, supported by rising corporate tax revenues and strong non-hydrocarbon GDP growth. The government is expected to increase capital spending while rationalising current expenditure.
Credit growth is projected to reach 10.5 percent in 2015, 11 percent in 2016 and 11.5 percent in 2017, on the back of project lending, increased lending penetration to the private sector and population growth.