Qatar’s Resilience Post Blockade - Business as Usual?

Published September 30th, 2018 - 07:19 GMT
Qatar’s budget outlays for this current fiscal year are based on an assumed oil price of $45 a barrel, but if the oil prices continue to coast as they do now, Seetharaman said investments would flow into the country. (Shutterstock)
Qatar’s budget outlays for this current fiscal year are based on an assumed oil price of $45 a barrel, but if the oil prices continue to coast as they do now, Seetharaman said investments would flow into the country. (Shutterstock)

If the oil prices continue to average around $66-$72 a barrel, Qatar will have a surplus of investments and a very nominal budget deficit, Doha Bank Group CEO R Seetharaman has said.

Qatar’s budget outlays for this current fiscal year are based on an assumed oil price of $45 a barrel, but if the oil prices continue to coast as they do now, Seetharaman said investments would flow into the country.

Oil prices fetching $100 a barrel is not far, he added, citing supply concerns precipitated by the fresh US sanctions on Iran and US-China-induced trade war fears.

“$100 a barrel for oil is very much on the cards,” Seetharaman said, adding that such a situation would a “plus” for the country that already has a stable economy and stellar performance indicators. 

Qatar commands the world’s respect because of its strong macroeconomic fundamentals and it was on display when the country raised $12 billion in its first dollar-bond sale since May 2016, the Doha Bank CEO said. The sale, which eclipsed Saudi Arabia’s $11 billion bond issued earlier in the same week, received more than $53 billion in bids.

“Qatar sought to raise $12 billion and the world responded with $53 billion,” Seetharaman said.

Read More

Qatar Explores How Fintech Can Shape Its Future Economy
Qatar Welcomes a New Qr 1.8 Million Investment Company

He was addressing a knowledge-sharing event — ‘Qatar’s Resilience Post Blockade- A Year on’ — hosted by the Doha Bank in the city recently. It had Qatar Central Bank Governor Sheikh Abdulla bin Saoud al Thani as the chief guest. 

The session was also attended by Doha Bank Chairman Sheikh Fahad bin Mohammad bin Jabor al Thani and Managing Director Sheikh Abdul Rehman bin Mohammad bin Jabor al Thani. 

Citing International Monetary Fund report, Seetharaman said, advanced economies are forecast to grow by around 2.4 percent in 2018 before easing to 2.2 percent in 2019.

Seetharaman contrasted that with the same agencies growth projection for Qatar to demonstrate the country’s economic stability.
“As per IMF, Qatar’s GDP is set to grow 2.6 percent this year and then average 2.7 percent during 2019-23, bolstered by Doha’s moves to increase liquefied natural gas production capacity by about 30 percent.”

In recent times, he said, Qatar’s long-term issuer ratings have been changed from negative to stable by Moody’s Investors Service, which affirmed the long-term issuer and foreign-currency senior unsecured debt ratings at Aa3. 

“According to Moody’s assessment, Qatar can withstand the economic, financial, and diplomatic boycott by Saudi Arabia, the UAE, Bahrain, and Egypt in its current form, or with possible further restrictions, for an extended period of time without a material deterioration of the sovereign’s credit profile,” he added.

Speaking about the reforms initiated in Qatar’s economic zones, Manateq CEO Fahad Rashid al Kaabi said Qatar has projects worth around $10 billion going in its free zones.

“They all have a different source of funding; some by the government, some by local banks and some by the developer itself,” Kaabi said, highlighting the confidence investors and fanciers have reposed in the Qatari economy.

Qatar Stock Exchange (QSE) CEO Rashid al Mansoori, who also addressed the event, touched upon the exchange’s increasing volumes and turnover post the reforms. Hassad Food Executive Director Mubarak al Sahuty said after the blockade, Qatar has managed to increase local vegetable production to 8,000 tonnes per year.  Acting Executive Director of Qatar Development Bank Saleh Majid al Khulaifi also addressed the event.


© Copyright Qatar Tribune. All Rights Reserved.

You may also like