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RIYADH: Qatar is on track to restore government revenues to pre-2014 oil price shock levels and double its economy by 2031, according to an analysis by Standard Chartered.
In its latest report, the UK-based bank said this recovery is a testament to the country’s strategic positioning within the global energy market and its ongoing efforts for economic diversification.
The analysis highlighted that Qatar is currently the sixth-largest gas producer in the world and holds the third-largest reserves of the fossil fuel, allowing the nation to leverage rising hydrocarbon prices effectively.
Standard Chartered said the Gulf country’s non-oil economy is also growing steadily, with the sector contributing to two-thirds of the country’s gross domestic product.
Qatar significantly boosted its global profile in the economic landscape after hosting the FIFA World Cup 2022, the International Monetary Fund said in July, while in April the World Bank forecast the country’s economy would grow by 2.1 percent in 2024, before accelerating to 3.2 percent in 2025.
Muhannad Mukahall, CEO and head of Corporate and Investment Banking at Standard Chartered, said Qatar’s return to pre-2014 government revenue levels marks a “significant milestone in its economic journey.”
He added: “However, this achievement was neither coincidental or accidental but in fact strategically driven by a combination of higher hydrocarbon prices, increased global demand for LNG, and substantial economic diversification efforts within sectors such as manufacturing, tourism, and finance.”
According to the World Bank, the oil price plunge from 2014 to 2016 was one of the largest crude price declines in modern history, with growing US shale production playing a key role in this dip.
The latest analysis revealed that rising oil demand and the projections of Brent prices hitting $100 per barrel by the end of this year could also help Qatar boost its revenues.
Standard Chartered said Qatar’s strong growth in the liquefied natural gas sector will also contribute to the nation’s economy in the coming years.
The report further added that the country’s plans to increase output at the North Field by 85 percent by 2025 will reflect in Qatar’s financial performance in future. This expansion is expected to nearly double natural gas output by the end of 2030 from the current 77 million tons per annum.
The Gulf state’s LNG sector has been a major revenue contributor, accounting for approximately 70 percent of total government revenue and 80 percent of export receipts.
The report added that investments in downstream industries have bolstered the manufacturing and petrochemical sectors, adding value to the country’s hydrocarbon sector.
The analysis revealed that Qatar’s Third National Development Strategy is expected to become another crucial factor that will determine its economic growth by 2031.
“While Qatar’s economic diversification efforts are set to be anchored by the Third National Development Strategy (2024-30), which has yet to be finalized, this has played a crucial role in the recovery of its government revenues, reducing economic dependence on hydrocarbons and enhancing resilience to price fluctuations,” said Standard Chartered.
According to the Qatari government website, the third phase of the National Development Strategy aims to transition the country into the next stage of development, entailing economic diversification by creating an investment and business-friendly environment.
The Standard Chartered report also underscored the importance of international financial institutions and foreign investments in driving Qatar’s growth in the non-oil private sector, which includes areas such as tourism, manufacturing, finance, and logistics.
“Qatar has implemented a series of reforms to improve the investment climate, including easing restrictions on foreign ownership, establishing free zones, and enhancing the legal and regulatory framework for businesses — all of which have successfully attracted significant infrastructure and energy sector investments from around the world,” said the financial institution.