Qatar Economic Outlook
Economic growth ebbed to 2.7% year on year in the first quarter according to recent data. The energy sector drove the expansion, while the non-oil sector slowed sharply from Q4 as the World Cup which took place in the country ended in December. Turning to Q2, monthly industrial production data through May suggests that growth in the energy sector slowed. In contrast, PMI readings through June point to an acceleration in non-oil private sector activity. In particular, firms in the hospitality industry likely benefited from the more than doubling of visitor arrivals in annual terms. In other news, in July Qatar inked a ten-year deal to provide condensate to a state-owned UAE firm. This is the latest in a string of long-term energy supply agreements reached over the last year, and is a sign of warming relations between Qatar and the Gulf Cooperation Council, after the latter lifted its embargo in 2021.
Inflation fell to 3.1% in July from 3.2% in June. The Central Bank hiked rates from 6.00% to 6.25% in late July, following the Federal Reserve’s same-sized hike. Panelists see inflation moderating on average this year from last on tighter monetary policy, the end of the World-Cup-related demand surge and lower commodity prices.