Everything's on the up in Qatar

But the dramatic growth of a well paid expatriate workforce, which outnumbers the local population by more than three to one, alongside a shortage of accommodation for these workers, has seen rental prices go through the roof and helped crank up inflationary pressure. Many professional expats might earn fat pay cheques but these are trimmed down by a predicted inflation rate of 8.5 per cent.

End in sight

After rental increases of jaw-dropping proportions last year, with two bedroom apartments seeing an 80 per cent rise and villas a 60 per cent hike, the Qatari government tried to damp down the negative economic impact of such increases in February by imposing a 10 per cent rent cap for a period of two years, but some landlords are thought to be flouting the new ruling.

In the short-term, the demand for high-end properties by professional expatriate workers will not easily be met and only when some of Qatar's billion dollar projects start to come on stream will rents start to ease. The Qatar-Pearl, the first of the country's ambitious real estate projects, won't be complete until 2009 but the first residents are likely to move in next year. Lusail, a $5 billion development, will accommodate around 200,000 people when it's finished, but that won't be until 2010.

For now, the worrying cycle of steep rents pushing up the costs of commodities and services and, thus, resulting in higher pay claims is likely to continue and, of course, rampant inflation tends to spell trouble for a nation's economy. But Qatar seems well set to buck the trend.

Banking on success

This week has seen the annual gathering of members of the Institute of International Finance in Singapore and Qatar's bankers and other analysts have been in attendance lauding their country's spectacular progress, with thoughts of economic slowdown far from their minds.

Commercialbank Group CEO Andy Stevens, speaking on behalf of all of Qatar's financial institutions, and quoted in the Gulf Times, said that the country's GDP had doubled in size over the past four years and would do so again in the next four years, potentially hitting $70 billion by 2010.

Stevens pointed to the fact that Qatar's bold investment commitment, some $130 billion over the next seven years, would enable its non-energy sector to start making significant contributions to GDP within a decade. He added that the country's development strategy had earmarked the whole economy and Qatar's private sector, in which so many of those well paid expatriates do their work, was also a big contributor to economic expansion and diversification.

With its position as a major player in the expanding global gas industry, sitting atop almost 15 per cent of the world's reserves, with the IMF this week predicting GDP growth of more than 12 per cent this year and 10.6 per cent next year and with its debt levels dropping like a stone, it's no surprise Andy Stevens described Qatar in his speech as, 'a place of happenings'.