Qatar’s economy to expand in 2021: FocusEconomics

January 13, 2021

Doha
Qatar’s economy is set to expand in 2021 on stronger domestic and foreign demand, FocusEconomics has said in its latest report.
Easing tensions with Gulf neighbors should also provide support, the report said.
Qatar’s economy appears to have recovered strongly in the third quarter of 2020 following second quarter’s sharp contraction with the non-energy private sector Purchasing Managers’ Index (PMI) averaging markedly higher amid the progressive lifting of lockdown restrictions, it said.
However, the report said, the oil and gas subsector contracted in annual terms throughout the period.
Turning to the fourth quarter, the report said, available signs are fairly positive.
The PMI remained above its historical average despite dipping somewhat from the third quarter, while the energy sector expanded
in October.
“On the fiscal front, the government announced the 2021 budget in December, which sees a slight decline in revenue on a highly conservative oil price of $40 per barrel, and expenditure down 7.5 percent from the 2020 budget to QR195 billion,” the report said.
FocusEconomics panelists see a 2.8 percent rise in GDP in 2021, which is unchanged from last month’s forecast, before growth of 3.7 percent in 2022.
Consumer prices fell 2.9 percent in November in annual terms, down from the 2.4 percent decline in October. Prices are seen rising this year as activity recovers and thanks to a supportive
base effect.
“Our panelists see consumer prices rising 1 percent in 2021, which is unchanged from last month’s forecast. In 2022, our panel sees inflation averaging 1.9 percent,” the report said.

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