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.
Qatar Inflation
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.