Qatar's economy is slated to expand by 2.1% this year, with growth expected to more than double in 2026 as additional LNG (liquefied natural gas capacity) comes online, the Institute of Chartered Accountants of England and Wales (ICAEW) has said in its latest report.

Estimating that the economy to have grown by 1.9% last year, it said the recent third quarter (Q3) gross domestic product (GDP) revealed output grew by 2% year-on-year, lifting the expansion in the first three quarters of last year to 1.4%.

The near-term outlook for the energy sector remains weak and expected to grow by just 0.6% this year, it said, adding this will still be an improvement on last year – weak industrial production data for Q4 (fourth quarter) confirm energy output likely contracted overall, according to the report.

The oil output has been relatively flat in recent years at around 600,000 barrels per day. However, the North Field gas expansion project will have a positive medium-term impact as the LNG capacity is raised to 126mn tonnes per annum or Mtpa in 2027, from 77 Mtpa currently.

The report projected the non-energy economy will grow by 2.9% this year, remaining the primary growth engine and mitigating weakness in industry.

Overall, the non-energy sectors continued to drive growth, boosting the expansion in the first three quarters to 2.9% y/y, while the continued decline in energy sector output resulted in a contraction to 1.1% over the same period.

Tourism has provided significant support to non-energy growth and will remain a driver of future activity and employment, the ICAEW said.

Data show the number of foreign arrivals neared 4.5mn last year up to November amid sustained double-digit annual growth.

"We estimate overnight arrivals reached 5mn by end-2024, a 23% increase on 2023 and 134% higher than 2019 levels. The launch of the pan-GCC (Gulf Cooperation Council) visa will likely help extend the positive performance this year, lifting the number of arrivals to 5.3mn," according to the report.

Forecasting fiscal surplus of QR27.3bn (3.3% of GDP), it said this is a significantly better outcome than the deficit of QR13.2bn penciled into this year's budget.

Given this projected gap and a nearing maturity, Qatar returned to debt markets this month, raising $3bn in a double-tranche, oversubscribed transaction.

The bonds will not be included in the universally tracked emerging market bond index, following a recent reclassification to a developed market from an emerging markets status.

The goods trade surplus remained wide in 2024, although it narrowed to $59.2bn from $66.3bn a year earlier, reflecting slightly weaker exports and stronger imports.

"We expect the surplus to widen modestly this year, which underpins the broader external surplus projection for 2025 of $34bn (14.9% of GDP).

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Santhosh V. Perumal