DOHA: The outlook for Qatar remains strong thanks to its vibrant energy industry, suggests the findings of a survey for Business Optimism Index (BOI) conducted last month.
As for the non-hydrocarbon sector, though, which is the key to the country's diversification effort, it shows slight moderation in the first quarter of this year as compared to the last quarter of 2011.
The good news on this front, however, is that businesses in the country are planning expansion inspired by higher economic growth.
Dun & Bradstreet South Asia Middle East Ltd (D&B) in association with the Qatar Financial Centre (QFC) Authority released the D&B BOI for Qatar the first quarter (Q1) of 2012 at a news briefing here yesterday.
Despite global uncertainty and financial instability in the euro-zone, Qatar's Business Optimism Index (BOI) suggests that the country is resilient to world economic adversities, the findings said.
This is due to the higher BOI scores for two key parameters - the Level of Selling Prices (LSP) and the Number of Employees. The BOI for LSP increased to 23 in Q1 2012 from 10 in Q4 2011.
While the Composite Index for the non-hydrocarbon sector has moderated to 40 in Q1 2012, with a five-point drop as compared to the last quarter, about 45 percent of non-hydrocarbon respondents in the survey plan on investing in business expansion compared to 35 percent in the last quarter of 2011.
Manjeet Chhabra, General Manager, Middle East, Dun & Bradstreet, said: "The business community in Qatar remains quite optimistic for the first quarter of 2012, although optimism levels in the non-oil and gas sector are marginally lower than in the previous quarter. The global economy, once again is in turmoil with the intensifying of the sovereign debt crisis in Europe and moderating growths in other parts of the world."
He added: "Qatar's economy proved to be resilient to the crisis of 2008-09, and given its strong macroeconomic fundamentals will continue to witness strong growth. The non-hydrocarbon sector has registered a 5 point drop to 40 in the composite score. All sectors have posted similar scores with respect to the composite index as in the previous quarter. The survey for the hydrocarbon sector shows that businesses expectations are stronger for Q1 2012."
Although, the United Nations estimates growth of world gross product at 2.6 percent for 2012 and 3.2 percent for 2013, which remains below the pre-crisis pace of global growth. But the outlook for Qatar continues to be strong since most of Qatar's hydrocarbon exports over the medium-term have already been tied up in long-term contracts. Growth in the hydrocarbon sector peaked in 2011 from an increase in its production capacity of LNG to 77 million tonnes per annum. Real hydrocarbon GDP will slow down to 3 percent in 2012 due to the country's self-imposed moratorium on development of new hydrocarbon projects until 2015.
According to the General Secretariat for Development Planning, Qatar's exports, propelled by LNG expansion and higher oil prices, are forecast to jump by 62 percent in 2011. This will increase the current account surplus to 23.6 percent of nominal GDP.
Yousuf Al Jaida, Director of Strategic Development, Asset Management and Banking, at Qatar Financial Centre Authority said: "This latest Business Optimism Index is a very useful snapshot of how businesses in Qatar see the relatively near-term future. While concerns about banking and debt problems, particularly in mature economies, have weighed on sentiment in the first quarter of this year, businesses remain pretty confident. Optimism in the Finance, Real Estate and Business services sector is holding up especially well, which underlines the considerable opportunities the QFC Authority has to help promote the financial sector in Qatar and the Gulf region."
The BOI scores for five of the six parameters have dropped in Q1 2012 compared to Q4 2011 levels. The BOl for the Volume of Sales parameter has marginally dropped by three points to 53 in Q1 2012 while the BOI for New Orders is down by nine points to 50. The BOI for LSP is 14, dropping nine points from Q4 2011 reading of 23, according to the survey.
© The Peninsula 2012
