Financial Crisis? What Financial Crisis?
Hold UT was asking about the financial crisis on our forum today (see Finance-Crisis in Qatar), to which my wife, looking over my shoulder, said:Financial crisis? Do we have a financial crisis in Qatar?
I am not reporting this to boast or gloat - I don't think we are perfectly secure in Qatar, although I'd rather be here than in the UK right now - but the majority of people are not feeling the crisis yet.
This is not the case in real estate, which despite office vacancy rates of just 1% has been experiencing property prices drops of up to fifty percent.
This is likely to continue: on a single page Qatar Today is reporting a 40% drop in demand for property - and a predicted 150% increase in office space!
Nor, with the price of oil falling to around $50 a barrel, does everyone believe the almost daily reassurance in the papers here.
No Credit Crunch for the Qatar Government
On the positive side we have a government who has a huge reserve of cash - and it is not afraid to use it.
It is pouring billions into the country's infrastructure, and according to one businessman I spoke to planned projects over the next few years are likely to mean an increase in the expat population rather than a decrease.
Natural Gas: Qatar's Saviour?
It's also worth remembering that Qatar is not wholly dependent on its shrinking oil reserves, and future revenue is likely to come from Natural Gas.
Natural Gas is still just coming on line, and the country that will turn America into the largest Natural Gas importer in the world is still producing at a fraction of its potential.
Furthermore, Natural Gas is often sold via long term contracts, meaning that the income provided is likely to be more stable than petrodollars.
So my main worry is real estate - and the huge borrowings companies that will have been made to finance their frenetic building.
But the average person on the street, like my wife, is barely aware of it. Hopefully, they'll stay that way.
Also see: Doing Business in Qatar | Job Vacancies in Qatar
Tags
financial+crisis
