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Monday, December 15, 2008

Qatar GDP: Soaring or Falling?

"Qatar's GDP to Soar 10% Depite Turmoil" said the Gulf Times today, quoting Samba Financial Group.

Or is it?

The statement ignores inflation, which is currently around 15%. If inflation does not fall, real growth would be around 5%.

Inflation is, in fact, projected to fall to 9%. If it does so, the growth would be around 1%, less than both the current 10% projected by Samba Group and the original 19.6% forecast for this year.

However, as the article points out, Qatar does seem to have an advantage in its reserves of Natural Gas.

Natural Gas projects are still coming on line, which should help maintain revenue growth even with falling prices.

Many Natural Gas projects are also sold on long term contracts, which will hopefully provide a more stable source of revenue than fluctuating oil prices.

Also see: Qatar Business