Foundations for growth: Investing in non-hydrocarbons sectors to ensure long-term expansion

High oil and natural gas prices combined with a 20-year strategic investment programme have catapulted Qatar into the ranks of the highest per-capita income economies in the world. Sustained GDP growth has created substantial wealth and raised the country’s standard of living to a level comparable to the most highly industrialised nations. Preliminary figures from the Qatar Statistical Authority (QSA) show real GDP growth reached 14.1% in 2011. In line with the National Development Strategy 2011-16 (NDS), GDP growth in 2012 and beyond is expected to slow to around 6% as the country imposes a moratorium on new hydrocarbons investments and embarks on its plan to diversify the economy. Indeed, the hydrocarbons sector’s portion of real GDP (categorised as mining and quarrying by the QSA) rose from 40.2% in 2009 to 44.3% in 2010 before inching up to 45% in 2011, compared to non-hydrocarbons activity declining from almost 60% in 2009 to 55.7% in 2010 and 55% in 2011. This reversal of the prior trend towards non-hydrocarbons activity was primarily driven by high energy prices.

DIVERSIFICATION: The country is entering a new phase in its development. Qatar has used its oil and gas revenues to create a strong foundation upon which other sectors can expand, with the non-hydrocarbons economy expected to rise by between 9% and 10% until 2016, according to the IMF. It is worth noting, however, that non-hydrocarbons GDP growth has been very volatile over the past decade, ranging from less than 5% in 2002 to over 40% in 2006. Winning the right to host the 2022 FIFA Football World Cup means that infrastructure expansion will likely support economic growth over the next 10 years to the tournament. Furthermore, investments in a diverse range of sectors including health care, education, tourism and financial services will ensure that recent gains can be sustained over the longer term. The government’s determination to expand its non-hydrocarbons sector is illustrated by its goal of fully financing the state budget from these revenues (see analysis). IMF analysis, however, indicates this target might not be attainable because public sector spending has not been reduced as planned. In 2011, for example, the government announced a significant hike in public sector salaries.

LONG-TERM PLANNING: Qatar’s National Vision 2030 (QNV 2030), the country’s long-term development plan, seeks to transform the country into “an advanced society capable of sustaining its development and providing a high standard of living for all of its people”. Through QNV 2030, Qatar’s leadership has committed to investing its resources in its people and “in world-class infrastructure to create a dynamic and more diversified economy in which the private sector plays a prominent role”. Within this broader context, QNV 2030 defines a number of long-term outcomes for the country and provides a framework within which national strategies and implementation plans can be developed.

In the more immediate term, Qatar’s first NDS identifies priorities for the country and seeks to articulate specific actions and targets for each sector (see analysis). The NDS calls for major investments in education, health and research to support the development of a knowledge-based economy that encourages innovation and entrepreneurship.

HYDROCARBONS BASE: However, for the foreseeable future, Qatar’s economic growth will continue to depend largely on its hydrocarbons resources. In 2011 oil and natural gas exports accounted for over 50% of GDP and almost 70% of the government’s revenue.

Qatar Petroleum (QP), a state-owned enterprise established in 1974, is responsible for all phases of the oil and gas industry in Qatar, including crude oil, liquefied natural gas (LNG), gas-to-liquids, petrochemicals and fertilisers. Through the Dolphin Energy project, which involves the participation of Qatar, the UAE and Oman, QP is also part of the first-ever cross-border refined natural gas transmission pipeline in the GCC. It is the largest energy-related venture undertaken in the region, with important implications for the broader regional political economy. Ras Laffan Industrial City, the centre of Qatar’s LNG production capacity, features one of the world’s largest LNG export facilities. The city also includes a massive residential city that caters to workers in the oil and gas industry. The industrial complex is located some 70 km north of Doha and spans an area of over 295 sq km, including the port facilities.

NORTH FIELD: Discovered in 1971, the North Field is the largest non-associated natural gas field in the world, with recoverable reserves of more than 900trn cu feet, or approximately 10% of the world’s known reserves. This makes Qatar the world’s largest holder of gas reserves after Russia and Iran. QP has built 14 LNG trains to exploit these resources, of which seven are operated by RasGas and seven by Qatargas, both joint ventures with global energy players. QP also aggressively maximises the resources of the North Field by extracting other products such as helium.

Qatargas has a total production capacity of 42m tonnes of LNG per annum, exporting primarily to Japan and Spain. RasGas currently has a total capacity of 36.3m tonnes of LNG per annum, selling mainly to South Korea, India, the US and Europe.

On January 6, 2011, QP and ExxonMobil signed an agreement for the Barzan gas project, which will be operated by RasGas. When completed, the additional production from the project will make RasGas the largest gas producer in the country.

STABILITY: While Qatar did not fully escape the effects of the global financial crisis, its long-term LNG contracts helped shield the country from the full impact. This ensured relatively steady government revenues and adequate liquidity in the local markets. Furthermore, guided by the NDS, Qatar is actively assessing tools and instruments to manage liquidity, although the riyal’s peg to the dollar has somewhat limited the range of policy instruments available to the Qatar Central Bank (QCB). During 2011 authorities maintained a balanced monetary policy approach, mopping up excess liquidity in the system through a phased sale of Treasury bills.

More generally, both state-owned entities and private sector firms have turned to international capital markets for financing. RasGas initiated entry into the market in 1996 with two project bonds worth $1.2bn, the first deal of its type in the Middle East. Since then a host of Qatari bonds have been issued, with most of them highly oversubscribed. The peak in activity occurred in 2009, when more than $15bn in notes were issued by entities such as Qtel, RasGas and Commercial Bank of Qatar. While the country has had minimal activity since 2010, Reuters reported in February 2012 that bond issuances in Qatar could rise over the year as the result of improving market conditions.

BANKING & FINANCE: Secured in part by Qatar’s publicly managed resources, the country’s largest banks are stable and well capitalised. The banking sector witnessed significant growth in 2011, with total assets growing by 22.1% in 2011, according to the QCB (see Banking chapter). Lending to the real estate and construction sectors has seen exceptional growth: credit to the real estate sector increased from QR10.6bn ($2.9bn) in 2006 to QR78.1bn ($21.4bn) as of April 2012. Similarly, commercial loans to the construction sector rose from QR5.1bn ($1.5bn) in 2006 to QR16bn ($4.4bn) over the same period.

The country’s largest lender is the Qatar National Bank (QNB), which accounted for 45.5% of banking assets as of the end of 2011. The QNB Group has expanded globally and is among the largest banks in the Middle East and North Africa region.

The Commercial Bank of Qatar, Doha Bank, Qatar Islamic Bank and the International Bank of Qatar round out the set of the top five lenders.

Tightening rules that govern the extension of credit to borrowers and other regulations have combined to increase competition in what is a small market. Indeed, although the average wealth of the population is high, only about 600,000 people out of a total population of 1.7m are considered bankable due to the large number of low-wage labourers. Moreover, more than 16 banks are competing for this relatively small customer base. This suggests that the market could see merger and acquisition activity in the future.

The Qatar Exchange, established in 1995, serves as the country’s central stock exchange and has emerged as one of the leading stock markets in the GCC region (see Capital Markets chapter). The exchange has helped local companies raise capital and has served to deepen Qatar’s capital markets. NYSE Euronext owns a 25% stake in Qatar Exchange under an agreement signed with the Qatar Investment Authority (QIA) in 2009. The exchange is regulated by the Qatar Financial Markets Authority and permits non-Qataris to invest up to 25% of the shares offered for trading.

GLOBAL TRADE: Figures from the QSA show that total foreign trade (exports plus imports) grew by 36% to reach QR348.48bn ($95.69bn) in 2010. Exports, which amounted to a total of QR272.27bn ($74.77bn) during that year, were dominated by oil- and gas-related products (see analysis). However, non-hydrocarbons exports grew by 38% to QR26.95bn ($7.4bn) in 2010 against the negative growth observed in the previous year. These include exports of petrochemicals, refined products, iron and steel, and chemical fertilisers.

According to the QSA, major export markets (for all products, by export value) in 2010 included Japan (29%), South Korea (17%), the EU (14%), India (9%) and Singapore (8%). Meanwhile, imports declined by 6.8% between 2009 and 2010, from QR81.73bn ($22.44bn) to QR76.21bn ($20.93bn) QR81.27bn ($22.32bn). Major sources of inputs included the EU (34%), the US (12%), China (9%), Japan (8%), the UAE (7%) and Saudi Arabia (5.2%), the QSA has reported.

CAPITAL FLOWS: While the hydrocarbons sector remains the primary attraction for foreign direct investment (FDI), Qatar actively encourages capital flows into the broader domestic economy, although most sectors of the economy still require majority local ownership.

Incentives for international investors include exemption from income taxes for 10 years, along with zero Customs duties on the import of machinery, equipment and spare parts for business use. Corporate tax is structured as a flat-rate tax of 10% and remittance of profits is free for all foreign investors.

The Qatar Financial Centre (QFC) plays an important role in bringing foreign investors to the financial sector, offering international companies an attractive trading environment with a robust legal framework, a strong regulatory environment and attractive tax structures. The QFC, which allows 100% foreign ownership, has been designed as a base from which international financial firms can access investment opportunities arising from the economic expansion of Qatar and the wider GCC.

INVESTMENTS: Meanwhile, the QIA, which was founded in 2005 to manage the oil and gas surplus revenues, invests in projects both domestically and internationally to help diversify the country’s revenue base.

Although official figures are not released, the Sovereign Wealth Fund Institute has reported that the QIA holds in excess of $85bn in assets. The authority’s high-profile acquisitions in the past have included Harrods department stores in London and the French football club Paris Saint-Germain, plus stakes in Barclays Bank and Spanish energy giant Iberdrola. The QIA is also increasingly active in East Asia, notably in Indonesia.

INFRASTRUCTURE: As part of its drive to diversify the economy, Qatar is investing heavily in infrastructure to create a favourable business environment and attract private investment. Indeed, the NDS has acknowledged the link between infrastructure and private investments, noting, “investment decisions by the private sector are critically influenced by the availability and quality of infrastructure services, which influence costs, productivity and [ultimately] asset returns.” The country’s significant infrastructure investments over the past decade are starting to pay off. The $11bn New Doha International Airport will help establish Qatar as a centre for business and tourism when it opens by the end of 2012 and will eventually have a maximum capacity of 50m passengers and 2m tonnes of cargo (see Transport chapter). Furthermore, it will directly generate jobs for 8000 employees with an associated impact on businesses providing ancillary services.

The QR27bn ($7.4bn) New Port Project is scheduled to be operational by 2016, although the third and final phase will be completed in 2030. The facility, which will eventually have a total cargo capacity of 6m twenty-foot equivalent units, will be one of the world’s largest deepwater ports, and is part of a broader infrastructure network that includes industrial zones and dedicated rail links to the New Doha International Airport.

QNV 2030 also calls for developing an integrated railway network that will link up to the pan-GCC railway, reducing the pressure on Qatar’s single land crossing into Saudi Arabia. The total cost of the national rail network, which is expected to include a metro system for Doha, has been estimated at QR130bn ($35.7bn).

Construction of the railway will be phased to connect high-traffic sections that are critical for the success of the logistics associated with the World Cup. The network’s final design will include a high-speed link across the planned Qatar-Bahrain Causeway that will reduce travel time from Doha to Manama to an hour.

Roads currently form a significant bottleneck for the private sector, but the government is in the process of addressing this issue. Indeed, between 2010 and 2011, Qatar’s quality of roads ranking jumped by three places in the World Economic Forum’s “Global Competitiveness Report 2011-12” (see analysis). Furthermore, the country has several large-scale projects in the pipeline that will continue to improve these conditions. The Qatar-Bahrain Causeway ($3bn), Dukhan Highway ($1bn), Doha Expressway ($0.44bn), Qatar North Highway ($0.6bn) and Al Khor to Al Ruwais Road ($0.6bn) projects are just a few notable examples of the investments currently under discussion or under way.

CONSTRUCTION: Driven by the country’s major infrastructure investment projects, the construction sector is an important economic component. However, its contribution to GDP has tapered off recently, declining from 12.2% in 2008 to 9% in 2011, most likely due to a slowdown in new oil and gas developments.

Nonetheless, the construction sector presents tremendous opportunity going forward, as the government has committed to spending significantly on infrastructure and World Cup-related initiatives (see Construction chapter). Currently in the planning stages, many of these projects are likely to start within the next five years. The size of these projects is potentially substantial, with Nicola Ritta, a German financial advisor, telling an investors conference in Munich in September 2011 that the total investment for the World Cup tournament could exceed some $220bn.

Construction is also moving ahead on major real estate and development projects such as the $1.35bn Barwa Financial District, which will serve global, regional and local financial firms. In late 2011 Qatar Today reported that the property sector is likely to see the launch of some QR36.4bn ($10bn) worth of projects in the coming years, adding that there are currently at least 18,000 residential and commercial buildings under construction in the Gulf state. Out of 160 towers proposed for launch in 2022, 13 will be ready by 2013.

PROJECTS IN PROGRESS: Major projects in progress include Lusail City, a mixed-use development located north of Doha that will eventually stretch along more than 35 km of Qatar’s coast. Development of the integrated city, which includes residential, office, shopping and entertainment space, is being headed up by the Lusail Real Estate Development Company, a subsidiary of Qatari Diar, a state-owned entity established in 2005 by the QIA. Qatari Diar is one of the country’s largest developers, with more than 49 projects worldwide under development or in the planning stages as of January 2012. Lusail City is expected to be completed by 2015 at an estimated cost of more than $7.4bn.

Equally impressive is Msheireb Properties’ $5.5bn project that seeks to transform much of downtown Doha. The development, which focuses on sustainability and community, will be home to more than 27,000 residents and is due to be completed by 2016.

In addition to a multitude of privately owned construction companies in the Gulf state, publicly listed Qatari developers and construction companies include Barwa Real Estate Company, Ezdan Real Estate Company, Mazaya Qatar Real Estate Development and the United Development Company.

In order to ensure the state addresses key topics and finds efficient solutions to face potential obstacles to meet the infrastructure deadlines leading up to the World Cup, Sheikh Jassim bin Abdulaziz Al Thani, the minister of business and trade, organises periodic roundtables. These bring together businessmen from the private sector, key representatives from the Chamber of Commerce and industry experts with governmental bodies. Each roundtable focuses on a different issue, such as building materials stocks, warehouses or the clearance of imported goods. Coordination between government agencies and the private sector is crucial considering the number of projects in the pipeline for 2022 and in line with the QNV 2030. Given the diversity and scale of the upcoming projects, the General Secretariat for Development Planning also stresses that coordination between all the governmental agencies is important for the implementation of the NDS.

The minister of business and trade monitors the findings of each roundtable to ensure solutions are implemented in a timely manner. The roundtables also aim at ensuring that local businesses will be able to participate in upcoming projects and that they will benefit from knowledge transfers with international players.

TOURISM DEVELOPMENTS: The Qatari government has increased its investment in the tourism sector over the last several years in an effort to diversify the economy and to raise the country’s global profile. Qatar is concentrating on targeting a niche, high-end market by developing multibillion-dollar resorts, venues and sporting events. The QSA has reported that the gross value added by trade, restaurants and hotels in the fourth quarter of 2011 rose 7.2% over the fourth quarter of 2010 (see Tourism chapter).

A large part of this activity comes from the meetings, incentives, conventions and exhibitions (MICE) segment, but the Qatar Tourism Authority (QTA) is aiming to reduce MICE’s 95% share of tourist arrivals and boost the leisure tourism segment to 30% of the total. Passengers arriving at or transiting through the New Doha International Airport will help drive this shift and provide a ready customer base.

To meet the growing needs of the sector, Qatar is investing some $17bn in tourism infrastructure as part of the NDS, including the development of luxury hotels, resorts and meeting facilities. The QTA estimates that hotel capacity will need to increase to more than 29,000 luxury rooms and apartments by 2012 to meet demand.

The Pearl – Qatar development, with its restaurants, retail facilities and residential properties, is already central to Doha’s leisure tourism offering and is expected to be fully completed by 2013. The Pearl – Qatar has changed Qatar’s landscape by creating an additional 32 km of coastline and housing residents on artificial islands designed to resemble a string of pearls. Furthermore, investments in Education City and new medical facilities will help support the development of health and educational tourism.

Winning the right to host the World Cup in 2022 catapulted Qatar into global headlines. While many of the major infrastructure projects associated with hosting the event would have been implemented anyway, it provides a compelling goal that will drive a significant investment programme over the next decade. Besides mega-projects such as the Doha metro system and the new airport, Qatar will also build a number of air-conditioned stadiums and facilities for football fans and players. Speaking at a conference in Doha, the secretary-general of the Qatar 2022 Supreme Committee said the event would contribute to a 10% growth in the value of the region’s hospitality and tourism sector, reflecting the country’s long-term ambitions.

SPORTING EVENTS: Although the World Cup has grabbed most of the attention, sporting events have been a target for the tourism sector for some time. Qatar has invested around $2.8bn in infrastructure over the last several years to support athletic competition. It recently hosted a successful 2011 Asian Cup and is also the venue for major tennis, golf, cycling and racing events such as the Qatar Powerboat Grand Prix and the MotoGP. Recent investments in the French football club Paris Saint-Germain and a sponsorship deal with Spanish team FC Barcelona will further establish Qatar as a regional centre for sporting events.

COMMUNICATIONS: The country’s affluent population presents tremendous opportunities for businesses in delivering content and selling services on web-based and mobile platforms. Content distribution is made easier through a very high rate of internet and mobile phone connectivity (see Telecoms & IT chapter). As of the end of 2011, Qatar’s internet user penetration rate stood at 81.6%, far ahead of the Arab states’ average of 29.1% and the global average of 34.7%, according to the UN’s International Telecommunications Union.

Similarly, the Supreme Council of Information and Communication Technology (ictQATAR), the body responsible for setting ICT policy and regulation, has estimated that the mobile penetration rate stands at 142%, showing more mobile phone subscriptions in the country than the number of people.

Furthermore, a large portion of the population is linked into social network sites such as Facebook and Twitter. According to Born Interactive, a media agency, an estimated 34% of the population had a Facebook account in 2010, behind only Bahrain and the UAE among the Gulf countries. The purchasing power of this segment is significant, representing a vast market for online and mobile advertising and sales.

Within Qatar, businesses are also increasing their web presence, although smaller local firms have been slower in this regard. While 95% of businesses with more than 500 employees have a website, only 6% of small businesses (fewer than nine employees) and 40% of medium-sized businesses (fewer than 100 employees) have invested in an online presence, according to the “Qatar Digital Media Landscape 2011” study commissioned by ictQATAR. The number of business service providers that host and design websites, develop mobile applications and provide online advertising services in Qatar is also growing.

KNOWLEDGE-BASED ECONOMY: QNV 2030 firmly establishes a mandate to strengthen the country’s human capital to support the transition towards a knowledge-based economy. Identifying education and training as a core driver behind this diversification, the government has invested in reforming the sector and in developing new education initiatives, programmes and projects over the last two decades (see Education chapter). In a bid to develop local capacity, the government also actively pursues a policy of Qatarisation to help ensure that nationals play a central role in the economic development of the country.

Within this framework, the education sector was allocated more than QR19bn ($5.2bn) in the 2011/12 national budget, a 12% increase from the previous year, underlining the government’s emphasis on developing the sector. In addition to providing adequate funding, the government has also made significant progress in reforming the sector, overhauling the education regulatory and oversight bodies, restructuring the primary school system and developing research institutions.

These reforms have opened a significant market for private sector participation. Qatar’s K-12 education system is built around the adoption of independent schools, supplemented with private Arabic, international and community schools. While the majority of Qatar’s student population is enrolled in the government-funded independent school system, private schools also play an important role in the country’s education development strategy.

According to the Supreme Education Council’s “Schools and Schooling Report”, out of 136 private schools, 103 are international and 33 are private Arabic schools, both of which cater mainly to the expatriate population. Education vouchers and other incentives will likely continue to encourage more students to attend private schools across the country.

RESEARCH & INNOVATION: Through the transformation of its education system and academic environment, Qatar is also positioning itself as a leader in research and development. Qatar Foundation (QF), a government-funded non-profit organisation established in 1995, has played a critical role in this area by developing centres for research in medicine, science, and technology, and by supporting research through the Qatar National Research Fund.

One of QF’s primary projects has been the establishment of Education City, a 14-sq-km complex comprising 80 educational, research, community development and science organisations. Education City is also the location of the Qatar Science and Technology Park (QSTP), which serves to bring industry and academics together in an innovative environment with the eventual goal of commercialising results.

In the field of medical research, QF has provided a $7.9bn endowment for the Sidra Medical and Research Centre, which is scheduled to be completed by December 2012 and will function as a teaching hospital affiliated with the Weill Cornell Medical College in Qatar.

Moreover, QF is the primary source of financing for the QSTP, a $300m free trade zone that hosts a number of companies, including Total, Microsoft, Cisco and GE. The foundation has also established the Qatar Research Institutes, composed of the Qatar Biomedical Research Institute, Qatar Environment and Energy Research Institute, and Qatar Computing Research Institute, to address specific needs in the country.

Finally the RAND-Qatar Policy Institute (RQPI) seeks to engage in research to develop an evidence base that informs policy decisions, with a track record of helping shape reforms in the local health and education sectors. Through its international reach, RQPI also serves to disseminate the resulting knowledge into the wider regional and global community.

HEALTH SERVICES: Promoting human development by nurturing a healthy population is enshrined in Qatar’s permanent constitution, which was ratified in 2004, and is a critical cornerstone of the state’s long-term strategy (see Health chapter). Under the QNV 2030, the state has committed to “developing an integrated system for health care, managed according to world-class standards”. Qatar’s population has traditionally had access to a high quality of health care services that has steadily improved over the last several decades. Life expectancy has risen as health care provision has developed, reaching 78 years in 2007, according to the “Annual Health Report” for 2009, compared with 53 in 1960. Infant mortality has also declined from 17 per 1000 live births in 1981 to 7.1 in 2009.

The government is actively encouraging private sector participation in the health sector. Hospitals have to be owned by Qatari citizens, but can benefit from government support in the form of subsidised land and utilities in the first two years of operation.

Data from the “Annual Health Report” for 2009 shows that private clinics and hospitals have only 394 beds and employ just over 1000 physicians. However, this number has grown steadily since 1999 when the entire sector was publicly managed. In addition to providing health care services, the private sector is also playing an important role in supporting industries, such as in supplying equipment and importing drugs. Private health insurance is also a relatively new market in Qatar, but is growing rapidly as demand for private sector health services has increased in recent years.

Upcoming reforms are likely to mandate health insurance for all residents. There are an estimated 200,000 people currently covered by private health insurance, representing a 100% increase over three years. The total volume of annual health care premiums is currently estimated to be QR400m ($109.8m).

MEDIA & COMMUNICATIONS: As the economy has grown so has the need and demand for information and news, driving significant expansion in the local and regional media industry and its related sectors (see Media chapter). Qatar’s print media emerged in the 1960s with the publication of Doha and Education magazines and has grown steadily in recent years with a number of print outlets established in the country.

A 2008 report from IREX, a US-based non-profit organisation, indicates that there are six active newspapers and nine magazines. The report also estimates the top five newspapers have a circulation of almost 100,000 copies per day. These include the Gulf Times (18,000), Al Raya (18,000), Al Sharq (15,000), Al Watan (15,000) and The Peninsula.

International newspapers and magazines, such as The Economist and Financial Times, are also distributed in the country. Al Jazeera, which is based in Qatar, is the main player in the broadcast market, with a range of 24-hour news and sports channels.

The explosion in content provision through print, radio, online and mobile media is driving corresponding growth in advertising revenues. According to figures from the Pan Arab Research Centre, advertising expenditure in the Middle East as a whole grew by 24% in 2010 to reach $13.7bn, with the Qatari market increasing by 16%, from $402m in 2009 to $467m in 2010.

REGIONAL ROLE: Using the prominence that it has gained through its energy-fuelled financial resources, Qatar has developed a strong role in regional and global politics, engaging with stakeholders across the Middle East and further abroad, balancing a host of highly sensitive issues in a changing political landscape. Successfully playing this role while managing internal political sensitivities will help establish Qatar in a regional leadership role, which would in turn have a number of potential positive impacts for the local economy.

In addition to diversifying the economy, raising productivity will be an important factor in Qatar’s continued growth due to its small population. Investments in research and development through vehicles such as QF and the QSTP are aimed at driving this shift. A business-friendly environment that provides a strong regulatory framework and a well-trained labour force are also key to growth in the longer term. Initiatives in education and training will help in this regard.

OUTLOOK: The rapid growth that has been achieved as a result of the country’s natural wealth and strategic long-term investments will have wider economic effects that the government is aware of and is trying to control. While 2009 and 2010 were characterised by mild deflation, prices have started to rise again, although not at the levels experienced in 2007 and 2008. Nonetheless, an expansionary fiscal policy does call for close monitoring of inflationary pressures by authorities. A weaker dollar also has the potential to raise inflationary pressure. Global demand for energy has significant implications for the economy. However, the long-term contracts Qatar maintains for its gas will help stabilise the country against price shocks.

Despite these challenges, the outlook for the next five years remains positive. Large infrastructure investments and increased production in non-hydrocarbons sectors such as manufacturing should maintain solid growth across the economy.

Qatar has already demonstrated its ability to leverage its significant natural resources to drive growth and is well placed to meet the goals and vision for economic diversification outlined by the national QNV 2030.