The
Qatari Economy
1.
Gross Domestic Product (GDP)
2. Public Finance
3. Balance of Payments
4. The Oil Sector
5. The Natural Gas Sector
6. Other Industrial Sectors
Qatar’s
successful economic diversification program continues to expand
rapidly with the development of projects to produce and export
natural gas in the form of LN G (Qatargas and RasGas), piped gas
(Dolphin), GTL (Oryx and Pearl), and investments in petrochemicals,
fertiliser and various other industries. However, the oil and
gas sector currently maintains its prominence as the largest contributor
to the overall GDP. The government’s current economic diversification
policy emphasises the optimal utilisation of Qatar’s large
reserves of natural gas for downstream industries and/or as feedstock
and also to further attract investment in the non-oil sectors
of the economy. Qatar’s diversification efforts, coupled
along with a buoyant oil-sector has led to rapid economic growth
and the emergence of Qatar as one of the richest countries in
the world in terms of GDP per capita. In the year 2007, GDP per
capita reached a record $57,936 with QNB estimates showing it
at $63,281 for the year 2008.
1. Gross Domestic Product (GDP)
Qatar’s nominal GDP growth continues at an impressive pace,
averaging 29.8% over the past five years (2003-2007). The oil
and gas sector as mentioned earlier is the principal component
of Qatar’s GDP and in 2007 accounted for 56.5% of overall
GDP, amounting to QR146,144 million ($40,150 million). The non-oil
sector encompasses a broad spectrum of industries ranging from
primary industries such as
agriculture to finance, insurance and real estate, among others
(see Appendix 3.1).
According to figures published by the Qatar Statistics Authority,
Qatar’s nominal GDP grew by an estimated 25.1% in 2007 to
reach QR258,591 million ($71,041 million). The primary factors
contributing to the GDP growth trend in 2007 were the 11.3% increase
in the price of Qatar’s crude oil, from $62.9 p/b in 2006,
to $70.0 p/b in 2007, and increased LN G exports totaling 27.4
million tons in 2007. For 2008, QNB estimates a nominal GDP growth
of 29.0%, with oil prices averaging $109.4 p/b for the first three
quarters of 2008, and LN G exports expected to reach 40.0 million
tons.
Qatar has traditionally had a low level of inflation, but this
has changed in recent years due to the sustained increase in housing
costs and the weakness of the US dollar, to which the Qatari Riyal
is pegged. Inflation averaged 8.7% over the past five years (2003-2007),
with inflation at a high of 13.8% in 2007.
2.
Public Finance
The state budget plays a vital role in the Qatari economy, as
public expenditure represents a large share of the total effective
demand, which is the main factor in achieving the Government’s
economic development goals. Fiscal policy is considered the core
of the overall economic policy, which aims to achieve full utilisation
of economic resources and to raise standards of living in Qatar.
Qatar’s prudent fiscal policies continue to receive acclaim
from sovereign ratings agencies, with the most recent upgrade
given by Capital Intelligence in January 2008, wherein it raised
the long-term ratings of Qatar to AA - from A+. Qatar has achieved
a budget surplus in each of the past eight fiscal years, totaling
QR102.7 billion ($28.2 billion).
The 2008/09 State Budget was the largest in Qatar’s history
and forecasts revenues to increase by 42.6% to reach QR103,300
million ($28,379 milion), while total expenditures are projected
to increase by 45.9% to reach QR95,900 million ($26,346 million),
resulting in a budget surplus of QR7,400 million ($2,033 million).
The budget was based on an oil price assumption of $55.0 p/b.
Appendix 3.2 outlines the state budget. The allocations for major
public projects in the 2008/09 state budget increased by 160.0%
to reach QR59,500 million ($16,346 million).
3.
Balance of Payments
Qatar has been enjoying consecutive Balance of Payments surpluses
since 1999, totaling QR146,717 million ($40,307 million). In 2007,
Qatar’s Balance of Payments surplus reached QR46,092 million,
according to preliminary figures released by the Qatar Central
Bank.
Qatar Statistics Authority figures show that Qatar’s exports
increased by a further 23.4% in 2007, to reach QR152,951 million,
from QR123,945 million in 2006. Crude oil accounted for the largest
export item in 2007, totaling QR75,761 million, followed by natural
gas with QR61,154 million. Qatar’s imports grew by 33.8%
in 2007, to reach QR72,158 million, mainly as a result of the
various energy sector, infrastructure and industrial projects
that are ongoing.
Services and private transfers were QR42,771 million ($11,750
million) in 2007, and capital transfers were a positive QR8,070
million ($2,217 million). For a look at the BO P data from 2003-2007,
please refer to Appendix 3.3, while the volume of Qatar’s
contracted LN G exports and oil production can be seen through
Appendix 3.4 and 3.5, respectively.
4.
The Oil Sector
Qatar’s main oil operations are carried out by state-owned
Qatar Petroleum (QP). QP produces oil on its own account from
one onshore and two offshore fields and from other fields through
Exploration/ Development and Production Sharing Agreements (EPSA
s/DPSA s) between QP and major international partners. Qatar’s
total oil exploration area is divided into 22 blocks covering
a total surface area of 43,426 square kilometres. According to
QP, Qatar’s oil reserves (including condensates) currently
stand at 25.7 billion barrels.
5. The Natural Gas Sector
Qatar currently has the third largest natural gas reserves in
the world, after Russia and Iran, estimated at over 910 trillion
cubic feet (tcf). These reserves are located in the North Field
which lies towards the North-East of the main land, extending
over an area of approximately 6,000 square kilometres, predominantly
underlying the territorial waters of the State of Qatar. QP has
initiated and developed two major LN G projects with foreign shareholders
for the purpose of utilising the North Field gas for exports in
the form of LN G. These projects are Qatargas and RasGas. Expansion
of LN G facilities through RasGas II, Qatargas II, RasGas 3, Qatargas
3, and Qatargas 4 is being pursued to meet additional export opportunities.
QP has also entered into joint venture agreements for further
utilising the natural gas resources, in the form of globally marketable
liquids (GTL).
6.
Other Industrial Sectors
In addition to its roles as the basis for the LN G industry, and
as a fuel input for power generation, natural gas is used in a
wide range of industries as feedstock to produce various value-added
products for both domestic consumption and exports. These projects
among others inlcude QAFCO , QAPCO , QVC, QAFAC , Q-Chem, Qatofin,
Ras Laffan Ethylene Cracker, Linear Alkyl Benzene and Qatalum.
For detailed information on the oil, gas, industrial, infrastructure
and other projects, refer to the latest edition of ‘Qatar
Economic Review’, published bi-annually by QNB .
