Doha

Qatar’s real GDP growth is expected to accelerate to 4.7% this year and 6.4% in both 2016 and 2017 as the government expands its investment spending programme in the non-hydrocarbon sector, QNB has said in its Qatar Economic Insight.
According to the report, Qatar is well-positioned to withstand lower oil prices thanks to its strong macroeconomic fundamentals including relatively low fiscal breakeven price, the accumulation of significant savings from the past and low levels of public debt.
Oil prices are also expected to stay lower for longer, averaging $55 for barrel in 2015-16 on oversupplied markets, before rising to $60 in 2017 as US shale output growth weakens, QNB said.
Inflation is expected to remain subdued in 2015 as international food prices continue to fall due to slowing demand growth and the build-up in stocks after good global harvests.
Domestic inflation is also expected to remain weak in 2015, despite strong population growth, as additional housing units are lowering housing inflation
Overall inflation is projected to pick up in 2016 and 2017 owing to the expected recovery in food prices in 2016 and higher oil prices in 2017, QNB said.
Lower hydrocarbon revenue and higher capital spending are expected to result in small fiscal deficits in 2015-16 before higher oil prices lead to a surplus in 2017, QNB said.
Hydrocarbon revenue is expected to decline with lower crude oil prices and production, but this will be partly offset by higher non-hydrocarbon revenue, supported by rising corporate tax revenue and strong non-hydrocarbon GDP growth.
The government is expected to increase capital spending while rationalising current expenditure, QNB said.
The country’s banking sector’s credit growth was projected to reach 10.5% in 2015, 11.0% in 2016 and 11.5% in 2017, on the back of project lending, increased lending penetration to the private sector and population growth
The loan-to-deposit ratio is expected to stabilise at around 110%; NPLs are forecast to remain low during 2015-17 as asset quality is expected to be backed by the strong macroeconomic environment
“The outlook for banking is positive with low provisioning requirements and efficient cost bases supporting bank profitability,” QNB said.