The Qatari authorities’ strong policy response has helped to mitigate the health and economic fallouts from the COVID-19 pandemic and the decline in international oil prices, IMF said in a release. Accoridng to the monetary fund, a gradual recovery in Qatar —with real GDP growth projected at 2.7 percent in 2021—will be supported by increasing gas production and the rebound in domestic demand.
"The authorities’ policy response has mitigated the economic impact of the shocks. The policy response was centered around a QR75 billion package to support the economy. A key part of the package, the Qatar Central Bank’s (QCB) zero-percent repo facility (QR50 billion) facilitated ample liquidity in the banking system which, together with QCB’s lowering of its policy rates, has supported credit to the private sector," IMF said.
"A credit guarantee scheme—totaling QR5 billion and administered by the Qatar Development Bank—has provided direct support to small and medium enterprises (SMEs) and protected jobs. Households and businesses were allowed to defer loan repayments until the end of the year and benefited from a waiver of rental and utility fees. These measures, along with others to ensure salary payments and/or basic allowances to workers and to reduce custom tariffs on critical supplies (all totaling QR2.1 billion), helped sustain economic confidence, dampen the impact of the shocks on businesses and households, and sustain the healthcare response," it said.
IMF projects that the economy will contract by about 2.5 percent in 2020 due to a lower global demand for hydrocarbons and subdued domestic activity during the lockdown in the Spring. "With lower hydrocarbon exports, the current account balance is forecasted to turn into a deficit of about 1.5 percent of GDP this year. Sizable financial inflows allowed for a buildup in international reserves," it said in the press release.
“A gradual recovery—with real GDP growth projected at 2.7 percent in 2021—will be supported by increasing gas production and the rebound in domestic demand. Risks to the outlook are mainly driven by the global outlook and titled to the downside. They stem from uncertainty about the global growth recovery, success and speed of vaccination and pandemic resolution, and oil prices, whose outlook depends on the global recovery," IMF said.
"Upside risks to the outlook arise from a successful resolution of the regional diplomatic rift and a stronger-than-envisaged global growth rebound," the press release stated.
(Writing by Seban Scaria; editing by Daniel Luiz)
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