$1 rise in oil price will balance the books, says Qatar

13 July 2016

Qatar’s GDP growth is likely to strengthen in 2016 but slacken in 2017 and 2018, the country’s Ministry of Development Planning and Statistics (MDPS) has said.

The ministry anticipates growth of 3.9% in 2016, driven by the expansion of the non-hydrocarbon economy and a boost from the start-up of the Barzan gas project.

The $10bn Barzan project is expected to move into full production in 2017 and will play a significant role in meeting Qatar's rising domestic gas demand.

However, in 2017 and 2018 when activity in the non-hydrocarbon sector starts to moderate and the added production from the new gasworks has already been taken into account, growth will start to slow, said the ministry.

The ministry expects oil prices to remain low in 2016. However, if a recent rally in prices continues the country’s fiscal deficit be lower than anticipated.

If average oil prices for the year rise by one US dollar, the current account will balance.

Saleh Al Nabit, MDPS minister, said: “If they persist, lower oil prices will narrow the government’s fiscal cushion but our considerable financial reserves provide an ample buffer.

“Lower oil prices and the prospect of continued volatility serve to underline the importance of implementing the initiatives in Qatar’s National Development Strategy. These will help to diversify the economy and to shield it from the vagaries of oil price movements.”

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