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Analysis of National Income of Qatar

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Since 1939, Qatar has relied on the oil sector and was vulnerable to change in oil prices. Qatar’s growth was supplemented by natural gas sector with the discovery and exploitation of offshore North Field, the world’s largest natural gas deposit. The hydrocarbon sector is a major contributor to the National Income of Qatar. Oil and gas earnings revenue is expected to continue to be generated with the expansion of energy sector’s long term capacity. Qatar has opened its energy sector to international firms. There are gas reserves worth 910 trillion cubic feet and is expected to generate revenues for decades to come.

In order to diversify the economy, revenue from hydrocarbon sector is reinvested in major infrastructure projects, tourism, finance sector and develop other components of hydrocarbon sector. Past few years the growth has been moderate and there has been a shift to non-hydrocarbon sector based growth. Qatar’s banking system has maintained the credit growth observed from 2003 to 2008 due to favorable monetary policy, adequate capital and less non-performing loans.

Spending for the preparation of FIFA World Cup 2022 is expected to have a major impact on growth rate of Qatar. Qatar’s GDP growth rate could be boosted by the announcement of discovery of largest-ever natural gas deposit off Emirates coast

Import and Export of Qatar

EXPORTS

   

IMPORTS

   

Country

Billions of USD

Percent Share

Country

Billions of USD

Percent Share

Japan

32.6

26.6

United States

3.9

14.1

South Korea

23.2

18.9

United Arab Emirates

3.2

11.3

India

14.7

12

Saudi Arabia

2.4

8.5

Singapore

7

5.7

United Kingdom

1.8

6.4

China

6.6

5.4

Japan

1.7

5.9

United Kingdom

4

3.2

China

1.3

4.7

Italy

2.7

2.2

Germany

1.3

4.7

Thailand

2.4

2

Italy

1.2

4.4

Spain

1.6

1.3

France

1.2

4.3

Indonesia

1.5

1.2

South Korea

0.8

2.9

Others

26.38

21.5

Others

9.18

32.8

Qatar exports Oil, gas and condensates to countries like Japan, South Korea and Singapore.

Qatar imports Machinery and Transport equipment’s, food, chemicals and manufactured goods. Major imports are from Japan, South Korea and India.

Revenue and Expenditure of Qatar

  • The revenue of Qatar has increased in the past decade due to increasing oil prices and increasing hydrocarbon production. Qatar avoided a drop in hydrocarbon revenue in 2009 due to long term gas contracts.
  • Investment income from QP, Qatar’s largest public enterprise with hydrocarbon companies, steel, fertilizers, real estate and Aluminum Company provide investment income which is net income after taxes and royalties.
  • Other income sources include corporate income tax of 10% levies on foreign companies.

Expenditure

  • In recent years substantial expenditure in utilities, land reclamation, communications and education.
  • Major capital projects executed by public enterprise Qatari Diar, real estate company owned by sovereign wealth fund QIA. Increase in government budget spending for capital projects.
  • Implemented National development Strategy
  • Preparation for FIFA World Cup 2022
  • 2011 salary increase led to 5% point rise increase in share of salaries and wages in expenditure. Salaries of civil servants have increased.

GDP (Current US $)

GDP is the sum of gross value added by resident producers plus any product taxes and minus any subsidies on products not included in the value of their output. GDP has increased consistently in last 10 years except 2009 when there was minor drop in GDP. Major contribution to GDP is from Industry sector followed by Service sector. The Industry sector comprises of Construction, Hydrocarbons and other industries like manufacturing and utilities.

Country name

2004

2005

2006

2007

2008

Qatar

31,734,065,019

44,530,493,222

60,882,141,103

79,712,085,615

115,270,051,623

Country name

2009

2010

2011

2012

2013

Qatar

97,798,348,830

125,122,302,747

169,804,731,108

189,944,609,791

202,450,014,110

Sector-wise contribution to GDP (Nominal terms) in 2013 - Oil and gas mining sector is the major contributor to Nominal GDP with 119.8 billion US $. Construction and Banking related financials have contributed a share of 4.4 and 3.2 with 9.4 and 6.7 billion US $ respectively.

GDP Per capita (US $)

GDP per capita is gross domestic product divided by midyear population. There has been steady increase in GDP and population of Qatar. Hence the GDP per capita took a hit from 84813 in 2008 to 62528 in 2009 but has picked up in the last 5 years. In 2013 GDP per capita was US $ 9335 which is 3rd largest in the world (as per data.worldbank). The population has tripled in past 10 years and if the rate of growth of population is greater than rate of growth of GDP then there could be a decrease in per capita.

Country name

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Qatar

44052

54229

62921

69167

84813

62528

71510

88861

92633

93352

Population of Qatar

Country name

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Qatar

720,383

821,159

967,602

1,152,459

1,359,114

1,564,082

1,749,713

1,910,902

2,050,514

2,168,673

Gross National Income, PPP

GNI is the Gross Domestic Product plus net receipts of primary income from foreign residents minus income by non-residents in the domestic economy. GNI has increased consistently in the last 10 years.

Country name

2004

2005

2006

2007

2008

Qatar

72,624,432,595

75,566,593,310

106,669,864,614

129,290,793,855

154,200,920,039

Country name

2009

2010

2011

2012

2013

Qatar

167,022,766,609

195,751,281,001

235,579,940,147

249,646,143,935

268,618,409,328

GNI Per Capita, PPP

Country name

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Qatar

100810

92020

110240

112190

113460

106790

111880

123280

121750

123860

Inflation, Consumer Prices (annual %)

Inflation is generally measured in Qatar using Consumer Price Index. Inflation is measured as percentage change in the consumer price index. It reflects annual percentage change in the cost that an average consumer has to pay to acquire a basket of goods and services. It is reported by Qatar statistics authority.

QSA released CPI in 2006 with base year 2002 and 1800 items in the basket from 400 suppliers. In June 2010 the base year was changed to 2007. Since 2009 QSA releases monthly CPI. CPI includes Food, Beverages & Tobacco, Clothing & Footwear, Rent, Furniture, Textile, Transportation and Communication and Entertainment etc.

Inflation peaked in June 2008 at all-time high of 15.1 % and a plummeted in December 2009 to record low of -4.9 % i.e deflation. 2-3 % of inflation (moderate) is desired by economies. Inflation plummeted in 2009 due to decrease in decrease in housing and food cost. An increase in inflation in recent years can be attributed to increasing demand for rental properties and increasing population has led to rising rents .Rents contribute 32% of CPI. Entertainment, recreation and culture which contribute to 11% of CPI index have also increased. Consumer price index touched 118 in July 2014.

FIFA World Cup 2022 games can lead to demand for large constructions and materials like concrete and steel. As demand increases price also increase. Preparations for World Cup include Construction of new city Lusail to host World Cup 2022, procurement of large metro network and major upgrade to Doha’s road construction. Government spending in FIFA World Cup 2022 along with influx of expatriate workers for the games could lead to inflation in near future.

Year

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Inflation

6.8

8.8

11.8

13.8

15.1

-4.9

-2.4

1.9

1.9

3.1

CPI

   

87.9

100

115.2

109.5

106.9

108.9

110.97

114.4

Unemployment, total (% total labor force)

Qatar has very low unemployment rate. The minimum unemployment was in 2000 and 2009 at 0.3 % and maximum in 2004 of 1.5%.

Qatar is a country with very low population and there is large number of expatriate workers in Qatar. Qatar is dependent on skilled and unskilled foreign laborers. In order to tackle unemployment of Qatari citizens, expatriate workers are replaced by Qatari citizens and precedence is given for Qatari Nationals in Labor Laws.

Labor force is growing rapidly. The private sector employs expatriates and Qatari citizen hold jobs in public sector. The Construction sector is the largest employer, employing more than 30% workforce. Other major employers are trade and domestic sector. In spite of its large contribution to GDP Oil and Gas sector utilize less than 10% of workforce. There was a salary increment in Public sector in 2011 and 2012 which has an impact on National Income.

Country name

2009

2010

2011

2012

Qatar

0.3

0.4

0.6

0.6

GDP Growth Rate

Qatar was one of the world’s largest fastest growing economies during the period of 2006 to 2012 driven by Hydrocarbon sector. The growth rate has decelerated in 2012 and 2013 due to temporary prohibition on LNG. As a result of government’s freeze on additional gas development projects in North Field until 2015, extraction of gas reached full capacity. The Hydrocarbon sector growth has reduced and hence its contribution to GDP growth has taken a hit. The Non-Hydrocarbon sectors like Construction and finance have made major contribution to GDP growth. The real GDP % change was 6.2% in 2012 and 5.6% in 2013.

Qatar’s growth rate has increased to 6.2 % in Q1 of 2014 contributed by ‘building and construction ‘ and financial services sector. The national income could be affected by factors like decreasing price of oil, increasing productivity of labor, non-hydrocarbon economy including construction, increasing population etc.

Country name

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Qatar

19.2

7.5

26.2

18

17.7

12

16.7

14.8

2.6

5.6

Balance of Payment

All monetary transactions at specific period of time is monitored using balance of payment. It is calculated quarterly and yearly. There are Financial, Capital and Current account. Qatar has trade surplus indicating low capital outflow and strong current account. Capital outflow reduced as overseas direct and portfolio investments contracted and hence Capital and Financial account has a low deficit. Current account has peaked as Hydrocarbon exports eclipse large imports.

There was an increase in import of machinery and materials in 2011 and 2012(Q1) which gradually decreased. Non Hydrocarbon sector exports are very small compared hydrocarbon sector. High spending in Infrastructure and construction related activities may increase the demand for import of capital and raw materials. The decrease in hydrocarbon production will take its toll on export revenue.

As % GDP

2008

2009

2010

2011

2012

Current Balance

23.1

6.5

19.1

30.3

32

Capital Balance

-20.8

0.6

-8.5

-36.5

-23.1

Errors and Omissions

-1.9

1.4

-0.9

-2.2

-0.5

Overall Balance

0.4

8.5

9.7

-8.4

8.4

Year

2012

2013

Current account

51,977,942,246

61,585,347,985

References

https://www.cia.gov/library/publications/the-world-factbook/geos/qa.html

http://www.emiratesnbd.com/plugins/ResearchDocsManagement/Documents/Research/20140701_QatarGDP.pdf

http://data.worldbank.org/indicator/NY.ADJ.NNTY.CD

Counterintelligence report on Qatar by HIS global insight

http://www.qix.gov.qa/discoverer/app/open?event=openWorksheet&worksheetName=ECONOMY/420&stateStr=eNolyMEKgzAMANCficHdbAV3ym3/MbokwpikxYbq/n6Onh48YANs7FSbINuHeH2mMAVIBYa4yDrMj8utUzvGXfk36Fk2wFoILYtSuKM2NafrkwlWT640xuWGe85OEx4vpwjs3wLtrYfuPzckKM4=&stateID=

Qatar selected issues by IMF in 2012

Qatar Economic Outlook 2013 -2014

http://www.gsdp.gov.qa/portal/page/portal/gsdp_en/knowledge_center/Tab2/QEO2013-2014%20Update_withCLICKS.pdf

Qatar Economic Insight by Qatar Governent


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