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Qatar growth to pick up in 2017 – QNB

Qatar growth to pick up in 2017 – QNB
(Photo Credit: Arabianeye - Reuters)

Mubasher: QNB Group expects Qatar’s growth to strengthen in 2017, as real gross domestic production (GDP) stood at 1.7% in the fourth quarter of 2016 and 2.2% on an annual basis, according data released by Qatar’s Ministry of Development Planning and Statistics.

“We expect growth to pick up in 2017 driven by stronger non-hydrocarbon sector growth due to higher oil prices, an increase in capital spending, and fading drag from manufacturing,” QNB stated in a commentary on Sunday.

Given a decline in crude oil by 0.7% and natural gas production due to maintenance carried out on some LNG trains, the hydrocarbon sector retreated 1% in 2016.

Meanwhile, the non-hydrocarbon sector grew 5.6% last year, mainly on the shoulders of the construction sector, which added 2.3 percentage points (pps) to the sector’s growth. Services, such as finance, government, and real estate, also contributed to the non-hydrocarbon sector, as population growth recorded a rise of 7.3% in 2016.

The growth spike in the hydrocarbon sector in 2017 will be led by expectations of oil prices reaching an average of $55 per barrel (pb) and $60 pb (an increase of 20%), a rise in the government’s capital spending by 3.2% in the 2017 budget with promises of increasing the allocation over the next three years, and the winding down of the manufacturing sector drag which had subtracted 0.2 pps in 2016 compared to adding 0.6 pps over 2014/2015.  

“Qatar has enjoyed the strongest non-hydrocarbon GDP growth in the region throughout the oil price decline,” QNB stated, adding that the Qatari economy has remained resilient in the face of low oil prices.