Doha, Qatar: Qatar is expected to boost its real GDP growth as stronger investment and private and public consumption will play a vital role in the non-oil sectors, data by Fitch Solutions stated.

According to the report, the growing industries will enable Qatar to rebound by 2 percent, supported by the growing hydrocarbon outcome.

However, the report notes that in 2023, the real GDP growth was at 1 percent following a decline during the second quarter, while it’s estimated to drive growth in the new year.

“We have cut our 2023 growth forecast from 2.1 percent previously, due to a downward revision to Q1 2023 growth (from 2.7 percent y-o-y to 2.2 percent y-o-y) and as Q2 2023 growth surprised to the downside because of weaker non-oil activity,” it said.

However, the economy revitalised and grew by 1.0 percent y-o-y during the second quarter, driven mostly by 2.3 percent y-o-y expansion in the oil sector, while the non-oil economy remained stable annually.

The report highlights that the mega sporting tournament, which took place last year was a thriving factor and drove a robust non-oil market during the second half of the year.

In the new year, the non-oil activity is anticipated to improve and will be the primary driver of the growth acceleration, mentioned Fitch.

Outlining the three main factors, the report depicts that foremost, the unfavorable base effects playing out from 2022 are estimated to fade. However, the upcoming AFC Asian Football Cup and the World Aquatics Championships, which will be held between January and February of 2024, will drive a double-digit y-o-y growth in non-oil activity during the first quarter of the year.

These global events are believed to attract more visitors to the country boosting services exports.

Secondly, the government announced $19.2bn (QR69.91bn) worth of projects that will be carried out throughout the year in the electricity and water networks sectors, the healthcare sector, and other infrastructure.

Fitch said: “Although we remain cautious about the number of tenders that will actually be issued, these plans should help reverse the downward trend in the construction sector (12.0 percent of GDP), which contracted by 7.5 percent y-o-y in H123.”

This, along with the lower cost of borrowing in the first half of 2024 and soaring energy prices, is expected to contribute to healthier y-o-y growth in fixed investment and government consumption in the coming year.

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