Despite the halving of oil prices from their 2014 highs, Qatar’s economy continued to grow robustly in 2016, particularly in the non-hydrocarbon sector where key infrastructure projects maintained progress, QNB Group said.
In its weekly economic analysis, QNB Group expected higher oil prices over 2017-2019 to have two key effects. First, they will help to boost government income and ease fiscal constraints. Second, higher oil prices will help support the government’s continued investment spending program which will be one of the key drivers to underpin growth in the non-hydrocarbon sector.
In terms of the hydrocarbon sector, we expect this to gradually recover as production picks up over the medium term. The analysis expects real GDP growth to accelerate to 2.6% in 2017 and 3.6% in 2018 before slowing to 2.7% in 2019. The analysis expects the outlook on oil to improve over 2017-2019 as excess supply in markets clears.
QNB said: “We forecast Brent crude oil to average $55 a barrel in 2017 from $45 a barrel in 2016 and rise to $60 a barrel by 2019. Higher oil prices should boost government revenues and thereby help to ease fiscal constraints. Revenues will also be helped in 2018 by the expected implementation of VAT.”
Read the full article at BQ Magazine.