The economy of Qatar is showing signs of improvement, and the International Monetary Fund (IMF) expects the country’s GDP to grow by 2% in 2024-2025
Qatar’s economy is recovering from the slowdown after the World Cup, with the country’s GDP expected to grow by 2% during 2024-25. This growth is supported by a rise in liquefied natural gas (LNG) production and improvements in economic reforms, according to a report from the International Monetary Fund (IMF).
Medium-term outlook
The country’s economy has started to show signs of gradual recovery after slowing down following the World Cup in 2023. The country’s GDP growth dropped from 4.2% in 2022 to 1.2% in 2023. This was mainly due to a decline in construction and slower growth in services after the global soccer event, according to a report from a multilateral lending agency after visiting the country.
For 2024-25, the economy is expected to grow by 2%, driven by government investment, benefits from the ongoing LNG expansion project, and strong growth in the tourism sector.
The medium-term outlook looks positive, with average annual growth expected to be about 4.75%. This will be helped by the large increase in LNG production and the implementation of the Third National Development Strategy (NDS3) reforms.
The IMF also noted that the economy is showing signs of gradual growth in 2024, based on recent economic indicators and labor market trends.
The IMF praised Qatar’s careful management of finances and improvements in its financial systems. It expects continued financial discipline in 2024, with responsible spending plans in the upcoming 2025 budget. This fiscal discipline, along with higher revenue and spending reforms, is expected to lead to long-term financial stability and help support the country’s economic transformation.
Monetary policy
The central bank’s careful actions have helped keep the banking sector stable, and the IMF says it’s important to stay alert to any potential weaknesses.
The IMF also mentioned that the Qatar Central Bank (QCB) has made progress in improving liquidity management, and it’s important to keep working on making the monetary system even more effective.
There has been strong progress since the launch of the NDS3, and it should continue to focus on building a knowledge-based, private-sector-driven, and sustainable economy.
According to the IMF, Qatar’s banking sector is in good shape due to strong financial reserves, careful supervision by the QCB, and enough money from the oil and gas sector.
Surprising Fact
Qatar’s inflation rate is expected to drop to 1% in 2024, mainly because of the central bank’s efforts to tighten monetary policy. The country’s budget and current accounts are expected to stay in surplus over the next few years, according to an IMF report.
IMF Recommendations
To achieve Qatar’s goal of moving from a government-driven economy to one that is more focused on knowledge and the private sector, the IMF suggests improving education and making the economy more complex.
The IMF also noted that the progress made by Qatar’s National Development Strategy 3 (NDS3) is encouraging, thanks to good planning and better teamwork among government agencies in carrying out reforms.
The IMF emphasized that Qatar should focus on building a highly skilled workforce, encouraging innovation, diversifying trade, attracting more foreign investment, improving local knowledge sharing, and making businesses more efficient.
Qatar is well-positioned to benefit from the growth of artificial intelligence (AI) and digital technologies, but the impact on the labor market needs to be carefully watched. A strong effort from all stakeholders will be needed to achieve the country’s climate goals, and improving data quality and availability will help guide progress.
Published: 3rd December 2024
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