Qatar set for another good year

Qatar's GDP has been lifting steadily throughout the year, quarter by quarter, and if the figure of $55 billion, or QR200 billion, which was predicted by the Minister of Finance Yousuf Hussain Kamal in a recent television interview cited by The Peninsula, is achieved, it will represent a massive jump of 73.9 per cent on the figure for 2004.

High global fuel prices have boosted Qatar's GDP growth this year but increased production of oil and gas as well as petrochemicals and other products has also been a factor. Once the country's mega investments in the cranking up of its LNG output capacity kick in within the next five years, Qatar's GDP will be set for yet another major gain.

Investing in the future

Unsurprisingly, given its much-publicised desire to improve its general infrastructure, Qatar is to invest a sizeable proportion of its increased income on providing better educational facilities for its people as well as better medical care. The Qatari government is keen to combine the need to lay a foundation for its economy away from its reliance on hydrocarbons with offering services and amenities akin to its status as one of the richest countries on earth.

By ploughing money into education, Qatar supports both the essential needs of its citizens alongside its own requirements for a growing pool of talent capable of taking on the nation's economic progress in years to come. With Qatar's government predicting an economic growth rate of 15 per cent over the next three years, nearly three times the IMF's global estimate for this year of 5.1 per cent, the Gulf state will be well placed to fulfil its promise to improve quality of life.

Reining in inflation

But one major threat to economic well being is spiralling inflation and with the rate in Qatar currently estimated at up to eight per cent, due mainly to steep rental prices, it is encouraging to hear the Qatari government say that a recent increase in the supply of available residential units should have a lessening effect next year. Yousuf Hussain Kamal, again cited by The Peninsula, believes rental prices will fall by up to 20 per cent within the next eight months as supply shortages begin to ease.

But the government is also targeting other inflationary pressures, including the need to develop more sand processing plants as well as cement and brick suppliers. With Qatar's real estate development boom in full swing, the high import cost of these products has obviously added to construction overheads and the government is determined to meet more demand locally.

Looking good for 2007

Qatar's government is confident it can contain inflation at around 3 per cent next year. If this is truly the case, then this won't simply be good news for the country's economy but also for those GCC members eyeing monetary union in 2010. It has been widely rumoured that Qatar is struggling to meet the planned inflation cap of the average inflation rate of all participating nations, plus an additional two per cent.

With further boosts to LNG and GTL production slated for next year, and with the government's budget for the current tax year being the largest on record, Qatar's aim to maximise its natural resources, build up its infrastructure and diversify its economy is well on track at the start of 2007.