Qatar Economic Outlook
After annual economic growth slowed to 4.3% in Q3, the economy should have performed well in Q4 as the FIFA World Cup spurred the hospitality sector; tourist arrivals were over 1.2 million in November–December, roughly double the number of arrivals in the whole of 2021. That said, construction activity cooled as Cup-related projects were completed, and public-sector activity will have been dampened by the decision to temporarily reduce school and government office hours. Moreover, the energy sector had a mixed performance, with output tumbling in December following strong growth in November. Turning to 2023, PMI data suggests there was a lull in private-sector business activity in January, followed by a rebound in February. Positively, business optimism was the strongest in over three years in February, likely linked to new business opportunities arising from the Cup.
Inflation fell to 4.2% in January from 5.9% in December, on softening demand as football tourists returned home. Meanwhile, the Central Bank kept the lending rate unchanged at 5.50% on 1 February, contrasting the Fed’s hike. In 2023, our panelists see inflation moderating as borrowing costs increase further and commodity prices recede.