Qatar’s GDP to Slow This Year as World Cup Bounce Fades
S&P Global Ratings expects economic activity in Qatar to slow to 2% in 2023 after a nearly 5% growth in 2022, which was supported by the soccer World Cup.
However, growth momentum at the world’s biggest gas exporter should strengthen again through 2026, bolstered by high investments and hydrocarbon production increases in line with the North Field Expansion (NFE), a major project set to expand Qatar’s LNG export capacity.
As Qatar derives about 40% of its GDP, 80% of government revenue, and 90% of exports from the hydrocarbon sector, S&P has based its forecasts on the expectation that the Brent oil price will average about $82 per barrel (/bbl) in 2023 and $85 bbl thereafter.
“This makes the country’s credit profile vulnerable to volatility in oil prices, to which most of its long-term gas contracts are linked,” analyst Trevor Cullinan and others said in a note issued on Wednesday.
GDP will dip this year as non-hydrocarbon sectors such as wholesale and retail trade, finance, and construction slow after Qatar’s hosting of the soccer World Cup in late 2022. “We forecast real GDP growth will gradually accelerate toward 2027 as gas production levels increase and non-hydrocarbon sector growth remains relatively strong at about 4%,” the report said.
According to S&P, between 2025 and 2027, Qatar’s LNG production capacity is set to rise by 64% to 126 million tons per year (mtpa) from 77 million currently, maintaining its position as one of the largest exporters of LNG.
S&P, which rated Qatar’s long-term sovereign credit at AA/Stable, said the ratings could be raised if risks related to its external position reduced, including a decline in the country’s external funding needs, alongside improvement in data transparency on international investment position and information on the government’s external assets among others.
Source : Zawya
