Qatar’s non-energy sector will strengthen and estimated to grow by 2.4% this year, up from 1.1% in 2023, according to Oxford Economics.

Growth in the non-energy sector improved at the end of last year, picking up to 1.7% year-on-year (y-o-y) in Q4-2023, from an average of 0.8% in the preceding three quarters.

Performance was mixed across sectors at the end of last year, with positive trends in the wholesale and retail and hospitality-related sectors offset by drags spanning administrative and professional services, finance and insurance, and information and communications technology.

The latest Purchasing Managers' Index (PMI) survey showed business conditions in Qatar have continued to improve, consistent with Oxford Economics’ 2024 non-energy sector growth projection of 2.4%.

The August PMI rose to 53.1 (the third-highest reading this year), from 51.3 in July. Most of the subindices, including output and new orders, showed stronger growth in August, and expectations about future activity strengthened to the highest level in nearly 18 months. The employment index was a key contributor to the improvement in the headline index in August as it surged to a near-record high.

Meanwhile, industry posted a sixth consecutive year-on-year decline in July, though downward pressure appears to be easing outside of plastics and cement production.

According to Oxford Economics, tourism has provided a key support to non- energy activities and will remain a driver of future growth.

Data show the number of foreign arrivals neared 3mn in the year to July, on track to meet the researcher’s forecast of 4.5mn overnight visitors this year.

The launch of the pan-GCC visa should help extend the positive performance in 2025, it said.

The researcher’s average inflation forecasts are unchanged at 0.9% this year and 1.8% for 2025. Headline inflation rose to 1.2% in August, from 0.2% in July, lifted primarily by higher communications and recreation and culture prices.

Restaurant and hotel costs also rose at a faster pace, while clothing, housing, and utilities remained on a disinflationary path. Rising wage pressures and non-staff costs will push output prices higher in the months ahead, contributing to a rise in inflation into 2025, Oxford Economics noted.

 

 

 

 

 

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