Qatar’s exchange rate stability may be maintained; price stability regained in 2022-2023: Allianz Trade

Qatar’s exchange rate stability may be maintained; price stability regained in 2022-2023: Allianz Trade

Qatar’s exchange rate stability is expected to be maintained and price stability regained in 2022-2023, according to global trade credit insurance firm Allianz Trade.

“We expect the peg (3.64 to the USD) to hold as the Qatar Central Bank has large foreign exchange (FX) reserves to support the currency. The currency peg has ensured relative price stability since 2010,” Allianz Trade said in its country report.

In 2021, however, headline consumer price inflation rose to over 6% year-on-year (y-o-y) at the end of the year owing to base effects (deflation a year earlier), higher energy prices and global supply-chain disruptions.

“We expect these effects to be transitory and inflation to gradually fall back to around 2% at the end of 2022,” Allianz Trade noted.

Qatar’s recovery from the double shock of the global Covid-19 crisis and the drop in oil and gas prices in 2020 will be solid, the trade credit insurance firm said.

Real GDP contracted by -3.6% in 2020, less than the GCC average of -4.9%, thanks to a more diversified economy and lower dependence on oil revenues – Qatar’s main export product is natural and manufactured gas.

A moderate recovery was seen in 2021, with estimated growth of