Qatar Economic Outlook
The economy clocked a multi-year high GDP growth rate of 8.0% in Q4. The reading was driven by the impact of the FIFA World Cup, although the energy sector also recorded robust growth. Turning to 2023, available data is positive. The non-oil private-sector PMI rose sharply from February, recording the strongest reading since last July in April amid accelerating demand for goods and services. In addition, visitor arrivals in Q1 averaged over triple the level observed in Q1 last year and well above pre-pandemic levels, suggesting a durable boost to tourism from last year’s hosting of the World Cup. Moreover, energy output surged in annual terms in February–March. However, the end of the World Cup and higher interest rates have dampened the construction sector, with building permits declining year on year in Q1.
Inflation fell to 3.7% in April from 4.0% in March, on easing external price pressures and tighter monetary policy. The Central Bank hiked rates by 25 basis points in May, with the lending rate hitting 6.00%. On average in 2023, panelists see inflation moderating from last year as borrowing costs rise, the World-Cup-related demand surge ends and commodity prices recede.