02 Jan 2018 - 11:58
A leap forward
Qatar’s economy is gaining momentum. Defying the nearly 7-month blockade imposed by the neighbouring countries, Qatar’s economy staged a swift turnaround in third quarter in 2017 with real GDP growing sharply by 5.5 percent, compared to the previous quarter. On year-on-year basis, the GDP showed a growth of 1.9 percent to QR208.92bn.
Saudi Arabia, the UAE, Bahrain and Egypt imposed the unjust blockade in a desperate effort to weaken country’s economy. But Qatar, in a strategic move, developed new trade routes, supported the private sector and injected additional capital into banks. Also, the Qatar Central Bank’s international reserves and foreign currency liquidity rose in November. The reserves and liquidity, a measure of the central bank’s ability to support the riyal currency, increased to $36.9bn last month from $36.1bn in October.
A breakdown of the country’s economic activities data in real GDP terms shows a strong performance by manufacturing and wholesale and retail trade sectors. While manufacturing segment grew by 10 percent on quarter-on-quarter, wholesale and retail trade segment rose by 10.9 percent. The figures released by the Ministry of Development Planning and Statistics reaffirm that the blockade has failed to make any negative impact on the economy.
Even the International Monetary Fund (IMF) has reconfirmed that the blockade has not impacted the implementation of key projects in Qatar. The initial concerns that the disruptions could impact the implementation of infrastructure projects has been mitigated by the availability of an inventory of construction materials and of alternative, and competitive, sources of imports, IMF noted in its latest report.
Qatar has rerouted its trade through Kuwait and Oman, and alternative food supply sources have been established, allaying fears of potential shortages. Qatar is also accelerating efforts to further diversify sources of imports and external financing, and to enhance domestic food processing, IMF noted in its report on ‘Economic outlook and policy challenges in GCC countries.”
In a far-reaching decision, a significant focus on strengthening the private sector has been laid in the new budget for fiscal 2018. Priority will also be given to SMEs sector and the 2022 FIFA Cup-related projects. The budget will also support diversification and aims to increase government spending on all projects. Efforts to push and support national products has borne fruits. All infrastructure projects are ahead of schedule.
Qatar’s economy is growing by leaps and bounds and has withstood all the pressures despite the blockade. New laws are in place to diversify the economy and attract foreign investments with key focus on achieving self-reliance in all sectors.