DUBAI (Reuters) - Growth forecasts for the Gulf state of Qatar were chopped in a quarterly Reuters poll on Wednesday after the government this month published the first quarterly contraction of its economy in years.
Qatar’s gross domestic product (GDP) will grow 2.0% in 2019, 2.4% in 2020 and 2.3% in 2021, the Oct. 8-21 poll of around 25 economists projected. Three months ago, the forecasts were for growth of 2.5% in 2019, 2.9% in 2020 and 3.2% in 2021.
Government data this month showed Qatar’s economy contracted 1.4% in the second quarter from a year earlier, hurt by a drop in the manufacturing and construction sectors.
“The 1.4% year-on-year contraction was weaker than we expected,” James Swanston of Capital Economics said, adding that the weakness stemmed from declines in both oil and non-oil GDP.
“The government had front-loaded a lot of the major infrastructure projects for the 2022 World Cup and most of it is now close to completion ... Additionally, the recent pick up in private sector credit growth is unlikely to be sustained,” he said.
Capital Economics projects a 0.3% contraction for 2019, with a recovery to growth of 2.5% by 2021.
Future boosts to Qatar’s economy are expected in the form of the football World Cup in 2022, the start of the delayed Barzan gas project by the end of 2019 and, further out, the expansion of the North Field gas project, economists said.
In its World Economic Outlook report this month the International Monetary Fund (IMF) said it expected Qatar’s real GDP to grow 2.0% this year, below an earlier 2.6% growth estimate.
The IMF revision for Qatar, however, was less sharp than for other Gulf economies like Saudi Arabia and the United Arab Emirates, for which the fund slashed 2019 growth expectations by over 1 percentage point.
Growth in the Gulf has been curbed by a fall in oil prices since 2014, austerity measures and, more recently, oil production cuts and slow global growth.
Economists polled by Reuters slashed the median 2019 growth forecast from three months ago for Saudi Arabia, the largest Arab economy and the world’s top oil exporter, by one percentage point to 0.7%.
It will then increase to 2.0% and 2.2.% in the following two years, the poll said.
The IMF cut its estimate for 2019 Saudi GDP growth to 0.2% from 1.9% last week. While it attributed the reduction to oil output cuts, the IMF said last month’s major attack on state-owned Saudi Aramco’s oil facilities added uncertainty to the outlook.
Polling by Md Manzer Hussain, writing by Lisa Barrington and Nafisa Eltahir, Editing by William Maclean