Saturday, April 13, 2024



Qatar Flag

GDP: USD237.3bn (World ranking 53)
Population: 2.7mn (World ranking 141)
Form of state: Emirate
Head of government: Tamim bin Hamad Al Thani (Emir)
Next elections: 2025, Legislative


  • Qatar’s vital role in the LNG market and commitment to diverse sectors, including sports and tourism, fosters economic stability and growth
  • Robust diplomatic ties with several countries as mediator on diplomatic disputes and host of global events increase the likelihood of international support in case of another deterioration of relationship with the Saudi-led bloc
  • The North Field East LNG expansion project, combined with low inflation and enhanced fiscal policy, supports significant economic development


  • Qatar’s heavy reliance on hydrocarbon exports exposes its economy to fluctuations in global energy prices, necessitating tax reforms
  • Geopolitical instability and trade bottlenecks, especially through the Hormuz Strait, pose risks to Qatar’s export-dependent economy
  • Despite political improvements, challenges in judicial effectiveness and business and labor freedom highlight areas for enhancing the overall business environment

Economic overview

An acceleration driven by natural gas, infrastructure and tourism

Qatar has one of the highest levels of GDP per capita in the world, yet the economy relies significantly on hydrocarbon exports. GDP growth is expected to accelerate to +3% in 2024. Investment in the energy sector, including renewables and fossil fuels, as well as a stronger tourism industry and better partnerships with neighboring countries, will drive momentum. Geopolitical instability in the region and trade bottlenecks are downside risks since the majority of exports are shipped through the Hormuz Strait. Average inflation is expected to fall in 2024, thanks to the base effects and lagged effects of previous interest rate hikes. The Qatari riyal is pegged at QAR3.64 per USD1. The peg is likely to stay in place, given the economic stability it provides and Qatar’s significant international reserves to defend it

The economic acceleration will reflect the government’s willingness to move forward with a variety of new infrastructure projects worth slightly less than USD19.2bn. The Public Works Authority (Ashghal) will play a key role, as the projects cover many sectors and provide potential for privatesector engagement. We also expect the tourism industry to sustain its recent vibrancy – visitor arrivals more than doubled year on year in the first nine months of 2023, reaching 2.9mn. Qatar will host the World Aquatics Championships in February 2024, confirming its ambitions as a worldwide athletic powerhouse and has also expressed interest in bidding for the summer Olympic Games in 2036.

The North Field East LNG expansion project will be a major economic driver, first through significant investment spending until the completion date (2026) and then by fast-expanding liquefied natural gas (LNG) output. Low inflation, along with progressive monetary relaxation, will also help to maintain private spending, while the government’s emphasis on economic diversification will drive stable development in nonenergy sectors.

A fiscal and military surplus ahead?

External liquidity will remain unproblematic in the next two years. Qatar has recorded large, sometimes huge, annual current account surpluses for more than two decades, with the exception of 2016 and 2020, when global oil and gas prices were particularly low. These surpluses have contributed to the buildup of the Qatar Investment Authority (QIA), a sovereign wealth fund currently estimated at approximately USD480bn. The combined international reserves of the central bank and the QIA represent over two times the annual GDP and cover more than 80 months of imports.

With oil and gas revenues accounting for around 85% of fiscal inflows, lower global energy prices might jeopardize tax collection. Declining oil and gas prices may offer the necessary motivation for the government to finally implement the long-delayed value-added tax (VAT). The government will also have to meet the expenditure commitments linked to a large-scale public works plan in 2024. The initiative will involve enhancements to the road and energy networks, as well as new water and sanitation infrastructure. Furthermore, the authorities have increased military spending, with a special emphasis on expanding the country’s naval capabilities. According to SIPRI, the country is already the biggest spender globally in defense on a per capita basis, with more than USD5 000 per inhabitant in 2022.

As a result, we expect VAT to be adopted in 2024, although at a modest rate of 5%. This will support budgetary surpluses of 4–5% of GDP each year in 2024–25. As the first phase of the North Field East gas development project begins, the surplus will increase by 2026. With a strong fiscal outlook, public debt is expected to decrease from 45% of GDP at the end of 2023 to 33% by the end of 2028.

Enhanced diplomacy as an act of self-defense

Qatar’s foreign policy is based on counterbalancing partnerships that strengthen its regional strategic position and serve as a backup for regime security. After the Saudiled blockade in 2017, the limelight provided by the football World Cup, increasing strategic relevance as a natural gas supplier and glimmers of stability and cohesion in the region between 2021 and October 2023 have reduced the likelihood of similar events occurring in the near future against the country. Relations between Qatar and its Arab neighbors, Saudi Arabia, the UAE, Bahrain and Egypt, have improved in a pragmatic manner. Property rights, a clear taxation system and fiscal health remain sound; on the other hand, judicial effectiveness and business and labor freedom present room for improvement.

CEOWORLD magazine - Insights - Qatar