publication April 16, 2018

Qatar's Economic Outlook - April 2018

Growth is expected to recover to 2.8% in 2018, and rise further to an average of 3% in 2019-20, as rising energy receipts help ease fiscal constraints, spending on the multi-year infrastructure upgrade ahead of the FIFA World Cup continues, and as the US$10 billion Barzan natural gas facility comes onstream in 2020. 

Qatar’s peg to the US Dollar means that monetary policy will gradually tighten in tandem with the US monetary policy. Though government spending will be maintained at current levels, partly also to offset the costs emanating from the restrictions imposed on Qatar, key tax policy and administration measures, including the introduction of a VAT and excises during 2018 are expected to further contain the fiscal deficit over the medium term, although inflation should also rise to close to 2.4% in 2018.

A recovery in imports, in particular capital goods related to infrastructure spending, should keep the current account surplus modest in the near term.

Absolute poverty is not an issue for citizens. In the context of the National Development Strategy 2011-16 the authorities have adopted a national relative poverty line and a welfare measurement methodology to track living standards of the population and identify vulnerable households.

This threshold is equal to half of the median household’s income, and about 8% of Qataris in 2013 lived on an income less than that—a share broadly unchanged from 2007. Lower incomes correlated with household dependency ratio, job market status, educational attainment, female headship and disability.