Qatar: Industrial production falls at a faster clip in March
Latest reading: Industrial production fell 67.9% in annual terms in March, following a 4.9% decline in the previous month.
Relative to the prior month’s figures, readings in March worsened for manufacturing (-13.4% in annual terms vs -3.3% in February) and energy (-79.3% vs -5.5% in February)—about 80% of industrial production. This severe contraction in the energy sector was triggered by Iranian missile strikes that significantly damaged Ras Laffan’s LNG infrastructure on 18 March, knocking out 17% to 20% of Qatar’s production capacity.
Outlook: Qatar’s industrial sector will likely continue contracting over the medium term due to prolonged disruptions in its key energy sector. Restoration efforts following the severe missile damage to the Ras Laffan gas infrastructure are estimated to require a three-to-five-year period, significantly limiting any near-term recovery. Furthermore, owing to the ongoing conflict with Iran, authorities have officially delayed a major planned LNG expansion project to early 2027, with the risk of an even longer pause if the war continues.
Panelist insight: On the outlook for the energy sector, Fitch Solutions analysts commented:
“We do not expect natural gas production to decline by the same rate as LNG exports (with output expected to fall 6.7%), given that upstream gas facilities have not been damaged at the time of writing, pipeline exports continue to flow, and upstream production is still necessary to meet domestic power demand.”