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Qatar Country Risk Report Q4 2018

Qatar Country Risk Report Q4 2018

Key View:

Qatari real GDP growth is likely to accelerate slightly in the near term. Hydrocarbon sector output is set for modest expansion and government investment into infrastructure and economic diversification initiatives will continue apace.

Rising hydrocarbon prices will substantially boost Qatar's fiscal revenues. This will more than offset a projected increase in fiscal spending, fuelled by government initiatives to develop infrastructure and non-hydrocarbon sectors.

Rising hydrocarbon prices will also drive a slight uptick in Qatari inflation over the months ahead. VAT implementation is likely to push prices up as well, though the impact will probably be felt primarily in 2019.

The QCB will continue to track the US Fed's monetary tightening cycle, although we could see further delays in implementing rate hikes in the near term, in a bid to support non-hydrocarbon growth.

Qatar's current account surplus will widen over the coming quarters, as hydrocarbon export earnings increase. Imports and remittance outflows will tick up on the back of gradually expanding non-hydrocarbon activity, though not at a fast enough pace to significantly alter the current account's positive trajectory.

The US-GCC Camp David Summit, if held, appears increasingly unlikely to produce a resolution to the GCC crisis. The GCC itself will probably remain intact in order to facilitate US engagement and hedge against future threats, though persistent tensions will severely restrict intra-bloc cooperation.

Key Risks

Given the economy's heavy reliance on the hydrocarbon sector, another collapse in hydrocarbon prices would impact negatively on Qatar's fiscal, external and growth dynamics. That said, we highlight that the country's vast sovereign wealth fund provides it with significant financial buffers against such a shock.

While unlikely, we cannot completely rule out an escalation of the GCC diplomatic crisis. This would negatively impact investor perceptions towards Qatar (as well as the broader region), weighing on non-hydrocarbon private sector investment and activity.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Qatari Growth To Tick Up On Modest Hydrocarbon Gains, Elevated Government Investment
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Hydrocarbon Price Gains To Boost Qatari External Position
Monetary Policy
Rising Hydrocarbon Prices And VAT To Drive Moderate Uptick In Qatari Inflation
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Qatari Fiscal Balance To Swing Into Surplus
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES, 2017
Currency Forecast
GCC Pegs To Remain In Place In Next Decade
TABLE: GCC – SUMMARY OF CURRENCY REGIMES
TABLE: GCC – FINANCIAL BUFFERS
Qatar Country Risk Q4 2018Contents10-Year Forecast
The Qatari Economy To 2027
Solid Long-Term Prospects For Qatari Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
GCC Crisis Update: Limited Scope For Breakthrough At Camp David
Long-Term Political Outlook
Limited, But Not Insignificant, Challenges For The Coming Decade
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: QATAR – MACROECONOMIC DATA AND FORECASTS

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