DOHA: Qatar anticipates a substantial drop in economic growth to 5.1 percent in 2012, down from a projected 15 percent for this year, due to receding hydrocarbon expansion, but planners said yesterday that slower growth should not be mistaken for a reversal of fortunes.
"Resources available to the economy will still expand," the country's development planning authority said.
The General Secretariat for Development Planning (GSDP), however, forecast in its 'Qatar Economic Outlook 2011-12' a strong real GDP growth at 15 percent in 2011, and said it expects nominal GDP growth to be 32.3 percent.
High oil prices in the first half of 2011 have greatly expanded the resources available to the country. The outlook foresees a sea-change in the economy's dynamics in 2012, and real GDP growth will slow to 5.1 percent.
The impulse to growth will increasingly depend on solid performance in other sectors.
Commenting on the expected drop in economic growth,
Dr Ibrahim Al Ibrahim, Economic Adviser at the Emiri Diwan, said: "The growth of up to five percent next year is positive and in any case does not mean a decline in economic performance."
"This rate of growth is natural and logical and consistent with the National Development Strategy 2011-16 emanating from the Qatar National Vision 2030 ".
Dr. Ibrahim said at a press conference that the strong growth in the current year was associated with an increased productivity in the hydrocarbon sector and high prices.
Dr Saleh Nabit, Secretary General of GSDP, said that Qatar's National Development Strategy identifies what needs to be done to position the private sector for the economy to diversify and continue growing robustly.
The Outlook spells out the macroeconomic implications of Qatar's dependence on oil and gas, and the ground that the non-oil sector will need to make up, he added.
With softening global commodity prices and a strengthening US dollar, the outlook predicts that headline consumer price inflation will stabilise at a manageable two percent in 2012.
Formidable budget and current account surpluses are likely in 2011, and even though moderating in 2012, they would remain comfortable.
The Outlook highlights the large risks coming from the rest of the world. The possibility of a sharp fall in activity in advanced economies--made worse by sovereign debt problems in Europe spilling over into those economies'' banking sectors and then going global--would affect Qatar.
"Good economic management means that we have to continuously monitor developments at home and abroad -- and that we are alert to the risks. I am confident that, if Qatar feels a downdraft, our authorities will respond in a timely and wise way," commented Dr Saleh Nabit.
© The Peninsula 2011
