Qatar flag Qatar: Economic and Political Overview

The economic context of Qatar

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Qatar lost its status of leading exporter of liquefied natural gas to Australia in 2020 but holds the third largest gas reserves in the world (estimated at 12% of the global total in 2021). The Emirate’s economy is thus heavily concentrated in the gas industry, which represents two-thirds of its GDP and almost 80% of export earnings. Like other Gulf monarchies, Qatar has been hit by the global decline in oil prices since 2014. However, the economic results have been better than that of its neighbours, due to successful economic diversification, namely via the development of large-scale projects. The country weathered the diplomatic rift with other Gulf crisis by finding new import and export routes, with its growth rate reaching 0.8% in 2019. Due to the COVID-19 pandemic, it plummeted to -3.6% in 2020 but came back to +1.9% in 2021. Subject to the post-pandemic global economic recovery, it is expected to bounce back to 4% in 2022 in a conclusion of an expected boom in the services sector ahead of the FIFA 2022 World Cup (IMF, October 2021).

General government debt has grown from 62.3% of GDP in 2019 to 72.1% in 2020 as the country continued to borrow on international markets and then back to 59% in 2021. The IMF anticipates a debt reduction in 2022 and 2023, with levels reaching 53.1% and 46.7% of GDP respectively. Current account surplus narrowed to 2.4% of GDP in 2019 from 9.1% a year earlier as global energy prices fell. However the negative economic impact of the COVID-19 pandemic and the fall in oil prices translated into a deficit in 2020 (-2.4% of GDP) before returning to positive territory in 2021 (+8.2%). It is expected to reach 11.6% in 2022 and 7.3% in 2023. In the medium term, the expansion of North Field gas projects is expected to be completed by 2024, further boosting gas output. Qatar has been implementing an economic diversification program to lower its dependency on the hydrocarbon sector, and in December 2018 the country announced it would leave OPEC in January 2019 to focus its efforts on natural gas (mainly due to the diplomatic tensions with neighbouring countries). New projects are planned in infrastructure and telecommunications, and various construction projects are in progress in preparation for the World Cup in 2022. Inflation was estimated to have fallen to -0.7% in 2019 and -2.7% in 2020 but came back in 2021 with a jump to 8.2%. The IMF estimates inflation to increase to 11.6% in 2022 and  7.3% in 2023 in its latest World Economic Outlook of October 2021. Indeed, Qatar is planning the introduction of a 5% VAT in 2022.

In 2022, the country’s most immediate challenge remains the economic, social and public health impacts of the COVID-19 pandemic. Qatar is overall a politically stable, rich country (it had the second highest income per capita in the world in 2021 according to the World Bank, PPP). It is estimated that 85% of the inhabitants are expatriates, whose rights are limited, despite the progress made with recent reforms. According to World Bank, unemployment is almost null, representing under 1% of the total labour force in 2021.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 175.84e145.45e169.18180.88186.49
GDP (Constant Prices, Annual % Change) 0.8-3.6e1.94.02.6
GDP per Capita (USD) 62,817e54,18561,79164,76865,467
General Government Gross Debt (in % of GDP) 62.372.159.053.146.7
Inflation Rate (%) -0.7-2.72.33.53.2
Current Account (billions USD) 4.23-3.48e13.8720.9013.58
Current Account (in % of GDP) 2.4-2.48.211.67.3

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Qatar’s agricultural sector is almost non-existent due to the country’s climate and a lack of arable land. It is estimated to account for only 0.3% of GDP, employing 1% of the workforce (World Bank, 2022).

The economy of Qatar is based on the oil and natural gas sectors: proved natural gas reserves represent 13% of the world total and the third largest in the world, while proved oil reserves exceed 25.2 billion barrels, which means the production could continue for over 56 years at current levels. Qatar's liquefied natural gas (LNG) industry has attracted tens of billions of dollars in foreign investment and made Qatar the world’s largest exporter of this commodity. Being the country’s main economic engine and government revenue source, Qatar is highly dependent on the oil & gas sector, thus after the drop in commodity prices in recent years, it tried to diversify its economy, focusing mainly on manufacturing, construction, leading non-oil GDP to steadily rise to just over half the total. The construction sector in particular is booming due to the preparation for the 2022 FIFA World Cup of football. Overall, the industrial sector contributes 52.3% of GDP and 54% of employment.

The services sector is based mainly on financial services and is estimated to account for 52.7% of GDP, giving employment to 45% of the active population (World Bank, 2022). Tourism is also an important economic sector: The Qatari government expects to increase the share of tourism in GDP to 4% from 3.5% by 2023.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.2 53.7 45.1
Value Added (in % of GDP) 0.3 51.2 53.8
Value Added (Annual % Change) 1.3 -3.0 -2.9

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

Find more information about your business sector on our service Market reports.

 
 

Find out all the exchange rates daily on our service International currency converter.

 

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
72/100
World Rank:
31
Regional Rank:
3

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
7.20/10
World Rank:
28/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.
 

Return to top

Sources of General Economic Information

Ministries
Ministry of Interior
Ministry of Foreign Affairs
Ministry of Finance
Ministry of Economy and Commerce
Ministry of Justice
Statistical Office
Qatar Planning and Statistics Authority
Central Bank
Qatar's Central Bank
Stock Exchange
Qatar Stock Exchange
Economic Portals
Arabian Business
Arab Economic Portal
 

Return to top

Any Comment About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Latest Update: July 2022