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Qatar economy grows 14% in 2011

Date: March 29, 2012
Category: News

Qatar’s economy expanded 14% in inflation-adjusted terms last year as energy exports gave it one of the highest growth rates in the world, although the pace was slower than analysts had expected, preliminary data from the Statistics Authority showed on Wednesday.

Real gross domestic product (GDP) of the world’s top liquefied natural gas exporter grew 4.4% quarter-on-quarter in the final three months of 2011, and 14.7% on an annual basis, the data revealed.

Last year’s growth was below a consensus estimate of 17.5% given by a Reuters poll of analysts, and below the International Monetary Fund’s latest estimate of 18.7%.

Qatar’s economy relies on hydrocarbons for over half of its output. The economy expanded 16.6% in 2010, according to an IMF estimate.

Growth is expected to slow to 6.6% this year as the impact of two decades of gas output expansion fades, largely because Qatar has put a self-imposed moratorium on new hydrocarbon projects to conserve resources, according to the latest Reuters poll of analysts. But that would still be the fastest rate in the Gulf.

“We do see a slowdown in the headline rate in 2012, but the focus will switch from export volume growth - which doesn’t necessarily feel like 14% growth - to domestic demand, so it’s still a positive picture,” said Liz Martins, senior regional economist at HSBC in Dubai.

“Drivers of domestic demand will be increased credit growth, wage rises and strong government spending.”

Heavy government investment in infrastructure will sustain annual growth in the non-hydrocarbon sector of between 9% and 10% beyond 2012, the IMF said in January.

The country of 1.7mn people, which pegs its riyal to the US dollar, has outlined public investment plans worth $95bn over five years to 2016, as it prepares to host the 2022 soccer World Cup.

Qatar raised basic salaries and social benefits for state civilian employees by 60% in September, while military staff received 50-120% rises. The government has yet to reveal its budget for the new fiscal year, which starts in April. Reuters