Country Report
Euler
Hermes
Economic
Research
Qatar
One of the most resilient players in the region
General Information
GDP
USD166.8bn (World Ranking 54, World Bank 2015)
USD609.89bn (World ranking 21, Wor
Population
2.2mn (World Ranking 143, World Bank 2015)
41mn (World ranking 32, World Bank
Form of state
Emirate
Republic
Head of government
HH Sheikh Abdullah bin Nasser bin Khalifa Al Thani (PM)
Cristina FERNANDEZ DE KIRCHNER
Next elections
None
October 2015, Presidential
Strengths
Weaknesses
 Unlike elsewhere in the region, leadership has
been passed to a younger generation, providing a
degree of popular support in the short term
 U.S. military support affords some regional
protection
 Large reserves of hydrocarbons, including the
world’s third-largest proven reserves of natural
gas (after Iran and Russia)
 Long-term development strategy that has
accelerated diversification away from upstream
oil and gas
 Large foreign asset base, including a Sovereign
Wealth Fund of USD335bn
 Regional instability (including Iraq and Syria) and
uncertainties (including Iran) impact on perceptions of
risk
 U.S. military bases and the country’s oil and gas facilities
are potential targets for terrorist or extremist groups
 Despite the active policy of economic diversification, the
economy relies heavily on hydrocarbons and this leaves
it vulnerable to changes in levels of global activity and in
international commodity prices
 Data transparency remains weak for an economy of its
size and strategic importance
Country Rating
BB1
By destination/origin (% of total)
Economic
risk
Business
environment
risk
Trade Structure
Financing
risk
Exports
Japan
Korea, Republic of
India
China
Singapore
Rank
1 14%
2 9%
3 8%
4 8%
5 7%
Imports
United States
China
United Arab Emirates
Germany
United Kingdom
Exports
Rank
Gas, natural and manufactured
54% 1 12%
Petroleum and petroleum products 32% 2 8%
Plastics in primary forms
2% 3 6%
Fertilizers
1% 4 4%
Organic chemicals
1% 5 3%
Imports
Road vehicles
Other transport equipment
Electrical machinery, etc.
Iron and steel
Specialised machinery
25%
19%
13%
7%
6%
By product (% of total)
Political
risk
Source: Euler Hermes
Commercial
risk
Source: UNCTAD (2014)
Economic Overview
Key economic forecasts
Non-hydrocarbon sectors drive growth
In recent years oil prices and increased competition
in the global liquefied gas market have curbed
economic growth. Oil and gas account for 90% of
total exports and over 75% of fiscal revenues.
Crude oil production has declined due to cuts in
response to the global glut and lower production
from maturing fields. As Euler Hermes expects
crude prices of around USD54/bbl (Brent) in 2017,
the oil sector is not set to be a growth driver in the
near future. The gas sector also disappointed
because of delays in the Barzan project, touted to
add 6% to existing output.
Nonetheless, growth should pick up from +2.5% in
2016 to +3.0% in 2017 and +3.2% in 2018. The
main driver is a strong expansion in the nonhydrocarbon economy. Qatar’s role as the host of
the 2022 FIFA World Cup has had positive knock-on
effects on the construction and services sectors.
The former benefits from a large public investment
related to the tournament. The government’s fiscal
consolidation efforts will not affect key projects such
as the Doha metro. Large-scale works have also
attracted considerable inflows of expatriate labor,
resulting in consumption growth and higher services
demand. Financial and business services continue
to thrive.
2015
2016e
2017f
2018f
GDP growth (% change)
3.7
2.5
3.0
3.2
Inflation (%, end-year)
1.6
2.3
3.0
3.0
Fiscal balance (% of GDP)
5.4
-7.5
-7.0
-6.0
Public debt (% of GDP)
39.8
55.0
64.0
70.0
Current account (% of GDP)
8.2
-1.8
-0.5
1.0
External debt (% of GDP)
48.4
54.0
56.0
57.0
Sources: National statistics, IHS, Euler Hermes
GDP Growth (y/y) of members of the Gulf Cooperation
Council
8%
Bahrain
Kuwait
7%
Oman
Qatar
6%
Saudi Arabia
United Arab Emirates
5%
4%
3%
2%
1%
0%
-1%
2016e
2017f
2018f
Assets held by Sovereign Wealth Funds of Gulf
Cooperation Council members (in USDbn)
792
598
592
66
66
34
11
Mubadala Development
Company (UAE)
State General Reserve
Fund (Oman)
Mumtalakat Holding
Company (Bahrain)
110
Abu Dhabi Investment
Council (UAE)
160
Public Investment Fund
(Saudi Arabia)
196
International Petroleum
Investment Company (UAE)
335
Investment Coorporation of
Dubai (UAE)
900
800
700
600
500
400
300
200
100
0
Long-term risks and uncertainties
It is uncertain if World Cup-related infrastructure will
be leveraged for diversification or cause overcapacity. Moreover, the treatment of migrant
workers and Qatar’s role in regional conflicts may
be scrutinized by the international community and
investors.
2015
Sources: National statistics, IHS, Euler Hermes
Qatar Investment Authority
(Qatar)
Though this move is bound to push up external and
public debt to about 56% and 64% of GDP in 2017,
respectively, interest payments (currently at 7% of
GDP) or liquidity issues should not cause distress.
Qatar’s total foreign assets, provided to the most
part by QIA, are equivalent to 236% of GDP.
2014
-3%
Kuwait Investment Authority
(Kuwait)
The government has made considerable efforts on
fiscal consolidation. It trimmed the number of
ministries from 18 to 14, canceled selected social
expenditures, and cut water and electricity subsidies
by 30%. To finance the fiscal deficit, the government
has chosen not to tap into assets held by the Qatar
Investment Authority (QIA) which continue to provide vital investment income. Instead, it has tapped
the domestic and international debt markets instead.
2013
-2%
Abu Dhabi Investment
Authority (UAE)
The fiscal balance is forecast to shift to a large
deficit of -7.5% of GDP in 2016 even though Qatar’s
fiscal breakeven oil price is reported to be a
comparatively low USD55/bbl.
2012
SAMA Foreign Holdings
(Saudi Arabia)
Public finances on solid footing
Sources: Sovereign Wealth Fund Institute, Euler Hermes
DISCLAIMER
These assessments are, as always, subject to the disclaimer provided below.
This material is published by Euler Hermes SA, a Company of Allianz, for information purposes only and should not be regarded as providing any
specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it.
This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be
prohibited. Whilst this information is believed to be reliable, it has not been independently verified by Euler Hermes and Euler Hermes makes no
representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any
responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise
stated, any views, forecasts, or estimates are solely those of the Euler Hermes Economics Department, as of this date and are subject to change
without notice. Euler Hermes SA is authorised and regulated by the Financial Markets Authority of France.
© Copyright 2016 Euler Hermes. All rights reserved.
View all Euler Hermes Economic
Research online
Contact Euler Hermes
Economic Research Team
http://www.eulerhermes.com
[email protected]
Last review: 2016-12-08
Country Risk Analyst:
Manfred Stamer, George Kibala Bauer
[email protected]
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