Qatar growth to gain momentum; country to remain large net external creditor: Euler Hermes

Qatar growth to gain momentum; country to remain large net external creditor: Euler Hermes

Qatar will remain a large net external creditor, thanks to the huge foreign-asset position in its sovereign wealth fund, trade credit insurance firm Euler Hermes said in its latest economic update.

Euler Hermes sees strengthening growth and falling inflation in Qatar this year and noted recovery is forecast to gain momentum in 2022, thanks to continued higher gas prices and a high Covid-19 vaccination rate that should allow for a further reduction of lockdown measures and support consumer spending.

The FIFA World Cup Qatar 2022 later this year should also support economic growth through increased tourism revenues.

“Our tentative growth forecasts are around 4% in 2022 and 2.5% in 2023. However, potential renewed restrictions, for example due to the outbreak of new Covid-19 variants, or sustained supply-chain disruptions in the industrial sector pose downside risks to our forecasts,” Euler Hermes said.

Fiscal reserves are solid and Qatar’s fiscal breakeven point ranged between $35 and $55 a barrel of crude oil over the past decade. Hence the government has recorded large annual fiscal surpluses in most years, except for 2016-2017 when oil and gas prices had been persistently low for some time.

Even in 2020, a small surplus of 1.3% of GDP