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Qatar’s nominal GDP may scale up to $197bn in 2023: World Bank

Qatar’s nominal GDP may scale up to $197bn in 2023 from $167bn this year, according to a World Bank forecast.
The country’s nominal GDP next year has been forecast at $178bn.

Qatar’s real GDP, according to a World Bank forecast may grow 3% in 2021, 4.1% in 2022 and 4.5% in 2023.

In its latest Gulf Economic Update, World Bank said Qatar is forecast to post a strong growth rebound among the GCC, with strong liquefied natural gas (LNG) demand in South and East Asia underpinning medium-term prospects, World Bank noted.

For the world’s largest natural gas exporter of the past two decades, growth will be spurred by construction work on the giant North Field Project, the first phase of which will boost the country’s LNG production capacity from 77mn tonnes to 110mn tons a year by 2025 at a cost of $28.8bn and the second phase of which will add another 16mn tons per year to capacity by 2027 at a cost of $11.2bn.

As the world’s largest natural gas exporter; Qatar leaned on higher natural gas production to moderate the contraction of its hydrocarbon sector, World Bank noted. GDP growth fell 3.7% in 2020, largely driven by the non-oil sector, more than half the economy.

The hydrocarbon sector still shrank; however, accounting for a more than one-third of the negative outturn, as a fall in natural gas prices, normally tracking oil prices, offset the effect of higher gas production and exports. Private consumption fell more than the overall economy, World Bank noted.

Qatar, which quit the OPEC in December 2018 ostensibly to concentrate on gas development in the giant North Field, led a meeting of the Gas Exporting Countries Forum (GECF), the 11-member inter-governmental organisation of the world’s largest gas exporters, in February 2020.

Headlined at the Doha meeting, Global Gas Outlook 2050 forecasts gas to overtake oil as the world’s largest energy source by 2050 (27% of the total).

According to World Bank, Qatar’s fiscal deficit of 3.6% of GDP in the year reversed a modest surplus of 1percent of GDP in 2019.The government postponed $8.2bn of unawarded contracts on capital expenditure projects, in a bid to balance its finances as gas prices declined in the year, crimping government revenues (hydrocarbon revenues account for 79% of government revenues).

The first in the GCC to raise funds in the debt market in 2020, Qatar sold $10bn in three tranches in April—$2bn on a five-year bond at 300 basis points above US treasuries, $3bn on a 10-year bond at 305 basis points over the same benchmark, and $5bn on a 30-year bond at 4.4%.

Although the final cost of the deal was 35 basis points below the initial offer rate, it was still 40 basis points above Qatar’s existing bonds due in 2024, 2029, and 2049. The government received $44bn in bids on the three-tranche sale.
Source: Gulf Times

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