QNB : Qatar's economy maintains strong growth momentum

Qatar’s economy continued to maintain its strong growth momentum in the second quarter of 2013, said QNB Group in its weekly analysis statement issued here Saturday. Qatar’s real Gross Domestic Product (GDP) expanded at a robust 6.0% pace (year-on-year), spurred by double-digit growth in construction, transport and communication, and financial, real estate, and business services. The economy expanded at a similar pace in the first quarter of 2013, according to revised figures. QNB Group expects real GDP growth to accelerate during the second half of the year (reaching 6.5% for the full year) and into 2014 (6.8%), as the implementation of large infrastructure projects accelerates and higher population boosts aggregate demand. The growth figures for the second quarter of 2013 confirm the continued process of economic diversification of Qatar’s economy away from its traditional role as a hydrocarbon exporter towards a manufacturing and services hub. The oil and gas sector only expanded by 1% year-on-year in second quarter of 2013, reflecting the moratorium on further exploration of the North Field. On the other hand, financial, real estate, and business services was the fastest growing sector (15.4% year-on-year), as banking intermediation accelerated and real estate services were boosted by the growing population. Construction activity accelerated (11.4% year-on-year) as Qatar’s infrastructure development program is gathering momentum. In addition, manufacturing grew by 6.4%, boosted by production from the new Pearl gas-to-liquids (GTL) facilities. The actual figures for the second quarter of 2013 are in line with QNB Group’s full-year forecast of 6.5% growth in 2013 and 6.8% in 2014, as highlighted in QNB Group’s latest report 'Qatar Economic Insight'. The acceleration in economic activity in the second half of 2013 is expected to be driven by the implementation of additional large infrastructure projects, like the Doha Metro Rail project. The key driver of growth will therefore continue to be the non-hydrocarbon sector at least until 2015, when the Barzan gas project is expected to start production.