News Column

Qatar

August 1, 2014



THE ECONOMY



Natural gas reserves have made Qatar's economy one of the world's fastest-growing. Qatar, which enjoyed real GDP growth of 6.2 per in 2012, grew at five per cent last year and is expected to grow at the same rate this year. Qatar became the world's top liquefied natural gas (LNG) exporter in 2007, bolstering the national budget, trade surpluses and foreign reserves. Oil and gas output is predicted to remain at current levels for at least the next 20 years, although worries about over-extraction of gas have crept in. Qatar's budgetary break-even point is estimated at $24 a barrel, according to the International Monetary Fund (IMF), which is much lower than other Gulf states. The country also holds a substantial offshore portfolio, estimated to be worth around $40 billion, and debt levels are low. Qatar will continue to try to diversify its economy, particularly after its successful bid to host the 2022 FIFA World Cup, but the bulk of private and foreign investment will be focused on the energy sector. Risk ratings suggest that Qatar is creditworthy and at low risk of external default.POLITICS



The US has an extensive military presence in Qatar, putting it at significant risk of terrorist attacks. While this makes it difficult for the country to disentangle itself from American policy in the region, the former Amir Shaikh Hamad bin Khalifa al Thani gave priority to mediation efforts, boosting Qatar's standing in diplomatic circles. It has provided support to the Syrian opposition and also rubber-stamped the Taliban's efforts to set up representative office in Doha. In March 2014 Qatar was involved in a spat with fellow GCC members Bahrain, Saudi Arabia and the UAE, who withdrew their ambassadors from Doha in response for Qatar's continued support for the Muslim Brotherhood. Relations with the Abu Dhabi soured further last month, after the UAE arrested two Qataris accused of spying. World Bank indicators, especially those regarding the rule of law, suggest that Qatar's governance framework is well developed by global and regional standards.

SOVEREIGN RATINGS



Standard & Poor's

AA

Stable

Moody's

Aa2

Stable

Fitch Ratings

NA

NA


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Source: Gulf, The (Bahrain)


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