Thursday, October 28, 2010 9:07 AM EDT
By Jijo Jacob
Qatar Central Bank (QCB) said in a new report the country's economic growth is poised to touch a whopping 18.5 percent, compared to 8.7 percent in 2009.
The report says the gas-rich Gulf state’s recovery has been bolstered by rising production of LNG, and a recovery in hydrocarbon prices this year, adding that the ambitious growth prospects are grounded on strong fundamentals of the economy.
The QCB report says the stiffest challenge to the economy's scorching growth would come from a fall in oil and gas prices which could hit hydrocarbon earnings, the engine of high-speed growth.
Oil and gas revenues have historically dominated the GDP, but there has been a decline in the share of hydrocarbons to the GDP in recent times as the country has been pushing ahead with efforts to diversify the economy.
According to data released by Qatar Statistics Authority in May, petroleum resources accounted for more than 45 percent of the country's 2009 gross domestic product of $98.3 billion. Gas exports fetched $24 billion while oil exports accounted for $21. 3 billion.
Between 2003 and 2008, three-fifths of nominal GDP came from the oil and gas sector, compared to 45 percent in 2009. Large scale investments in infrastructure, education and healthcare have driven diversified growth in recent years.
Stability in domestic rents and an easing of food prices have limited inflation, the report says. QCB says core inflation would be about -1.6 percent excluding the rents and food items.
Inflation had peaked at 15.2 percent in 2008, before plunging to -4.9 percent a year later. The report says the real estate sector, a key driver of deflation, is likely to remain weak, dampening the inflationary outlook further.
QCB notes that inflation in consumer prices dipped to sub-zero levels in the aftermath of the financial crisis. It points out that IMF has forecast consumer inflation to stabilize at 1 percent this year.
The report also says banking institutions in the country have been unaffected by rumors of a possible revaluation of the Qatari Riyal and de-pegging from the dollar.
The report says the gas-rich Gulf state’s recovery has been bolstered by rising production of LNG, and a recovery in hydrocarbon prices this year, adding that the ambitious growth prospects are grounded on strong fundamentals of the economy.
The QCB report says the stiffest challenge to the economy's scorching growth would come from a fall in oil and gas prices which could hit hydrocarbon earnings, the engine of high-speed growth.
Oil and gas revenues have historically dominated the GDP, but there has been a decline in the share of hydrocarbons to the GDP in recent times as the country has been pushing ahead with efforts to diversify the economy.
According to data released by Qatar Statistics Authority in May, petroleum resources accounted for more than 45 percent of the country's 2009 gross domestic product of $98.3 billion. Gas exports fetched $24 billion while oil exports accounted for $21. 3 billion.
Between 2003 and 2008, three-fifths of nominal GDP came from the oil and gas sector, compared to 45 percent in 2009. Large scale investments in infrastructure, education and healthcare have driven diversified growth in recent years.
Stability in domestic rents and an easing of food prices have limited inflation, the report says. QCB says core inflation would be about -1.6 percent excluding the rents and food items.
Inflation had peaked at 15.2 percent in 2008, before plunging to -4.9 percent a year later. The report says the real estate sector, a key driver of deflation, is likely to remain weak, dampening the inflationary outlook further.
QCB notes that inflation in consumer prices dipped to sub-zero levels in the aftermath of the financial crisis. It points out that IMF has forecast consumer inflation to stabilize at 1 percent this year.
The report also says banking institutions in the country have been unaffected by rumors of a possible revaluation of the Qatari Riyal and de-pegging from the dollar.
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