Qatar’s ICT sector has been a “key beneficiary” of the government’s drive to diversify the economy away from hydrocarbons, notably through its e-Government 2020 Strategy and “strong support” for the development of smart cities, BMI has said in a report.
The Fitch Group company holds a “positive outlook” on the Qatari economy and the IT market as a whole despite the global oil slump that has lowered oil prices since 2014.
IT market growth in Qatar, it said, will be maintained by large government programmes, modernisation efforts and public sector initiatives aimed at hosting the FIFA World Cup in 2022.
This is all set against the backdrop of Qatar’s high private consumption levels, which combines with the bright economic growth outlook to support our view of the market as a regional outperformer.
BMI expects the government to remain committed to these goals, despite the sharp drop in oil prices in the second half of 2014. Indeed, lower oil prices further emphasise the importance of catalysing growth in other sectors, and the government can rely on large fiscal reserves to continue enhancing IT systems across government agencies and state-owned companies, at least over the next two to three years. According to BMI, computer hardware sales in Qatar would exceed QR4bn in 2019, up from QR3.1bn in 2014, which shows a compound annual growth rate (CAGR) of 5.2% in local currency terms.
Market saturation means there will not be explosive growth, with even the tablet market mature by 2015, but a combination of strong consumption growth and underlying population growth will sustain steady medium-term growth in spending.
Software sales in the country would scale up to QR828mn in 2019 from QR548mn in 2014, a CAGR of 8.6% in local currency terms.
“The dominance of oil and gas in the local economy limits the size of the software market, but scope remains for growth in the enterprise market over the medium term through the modernisation and diversification government initiatives,” BMI said.
Qatar would register IT services sales totalling QR2.07bn in 2019, from QR1.2bn in 2014, a CAGR of 11.6% in local currency terms.  “Services are expected to perform well in the IT market in the medium term due to demand for cloud computing, smart systems and security services from the public and private sectors,” BMI said.