Qatar: Private Sector Breathes Sigh of Relief As Restrictions Ease

Published August 5th, 2020 - 08:30 GMT
Qatar: Private Sector Breathes Sigh of Relief As Restrictions Ease
According to FocusEconomics Consensus Forecast-Middle East & North Africa for August report, Qatar’s energy production surged in May, adding more positive momentum to the country’s economy. (Shutterstock)
Highlights
Consumer prices fell 3.4 percent in annual terms in June, down from May’s 3.1 percent decline, as lockdowns continued to drag on prices.
Momentum in Qatar’s non-energy private sector rebounded somewhat in June amid easing of restrictions with PMI recording the largest-ever month-on-month increase, FocusEconomics has said in its latest report.
“Turning to the third quarter, the country entered the phase three of the government’s four-phase easing plan on July 28. Gyms and health clubs reopened and limits on public gatherings were reduced, among other measures, which should be supporting a further recovery in activity,” FocusEconomics said in the report.

According to FocusEconomics Consensus Forecast-Middle East & North Africa for August report, Qatar’s energy production surged in May, adding more positive momentum to the country’s economy.

The report, however, said the economy is expected to contract this year.

“The lockdown will cripple the tourism sector for the majority of the year, while depressed energy prices will weigh heavily on government finances and the external sector,” it said.

Nevertheless, the report said, a strong fiscal stimulus package to support the non-oil private sector should cushion the downturn.

“FocusEconomics panelists see a 3.2 percent contraction in GDP in 2020, which is down 0.4 percentage points from last month’s forecast, before the growth of 3.1 percent in 2021,” it said.

Consumer prices fell 3.4 percent in annual terms in June, down from May’s 3.1 percent decline, as lockdowns continued to drag on prices.

“Consumer prices are seen falling over 2020 as a whole on weak demand. Our panelists see consumer prices falling 1.1 percent in 2020, which is down 0.5 percentage points from last month’s forecast. In 2021, our panel sees inflation averaging 1.5 percent,” it said.

According to the annual data released as part of the report, the country would witness a sustained increase in both imports and exports in the coming years.

While the merchandise exports from the country are expected to rise from $54.2 billion in 2020 to $86 billion in 2024, the report said, merchandise imports would increase from $28.8 billion in 2020 to $36.3 billion in 2024.

FocusEconomics, a leading provider of economic analysis, has also forecast that Qatar’s trade balance would rise from $25.4 billion in 2020 to $49.8 billion in 2024.

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