(MENAFN- Gulf Times) Qatar is one of the "best placed" GCC countries to weather the current fall in oil prices, PwC said and forecast that the
country's real GDP to grow by 6.5% this year, and average around 6.2% a year between 2016 and 2019.
PwC's forecast has been based on factors such as Qatar's projected population growth, resilient oil and gas sector, non-energy
sector growth and stable inflation.
However, to overcome some of its current challenges and create a thriving investment environment, the author of the report,
Stephen Anderson, also managing partner of PwC Qatar, has urged Qatar to further strengthen its macro-fiscal capabilities.
Qatar's vast natural gas reserves and emphasis on gas exports, along with the decoupling of gas and oil prices in the aftermath
of the Japanese earthquake of 2011, suggest that it is likely to be one of the best placed GCC nations to weather the current
fall in oil prices.
PwC expects strong growth in Qatar's working age population with the population projected to grow by an additional 10% per year,
reaching 2.5mn in 2018 due to the continuous influx of immigrant workers.
Qatar has a resilient oil and gas sector due to the country's leading position in the LNG market and new gas sector developments.
The report says the substantial growth in the non-oil and gas sector should outpace hydrocarbons, driven by government
expenditure, which PwC expects to continue growing strongly following an 18% average annual growth rate between 2008 and 2013.
The country's growth forecast has also been based on projected "stable inflation," which it said should run at around 4% over the
next five years, resulting from low oil prices partially balancing upward pressure brought on by the planned investment
programme.
However, PwC stressed Qatar was "not immune" to the fall in oil prices and there are challenges that remain for the country.
Increased gas supply in the medium term may create downward pressure on global gas prices, it said.
The impact of global oil prices has already weighed on major downstream petrochemical projects in Qatar. In addition, while the
report forecasts project inflation to stay at manageable levels in the medium term, the threat of inflation volatility (due to
the unprecedented investment programme related to the 2022 FIFA World Cup) remains.
Finally, diversifying government revenue beyond hydrocarbons continues to prove difficult for Qatar, PwC said. Anderson said, "To
meet these challenges and create a thriving investment environment we recommend that the authorities continue to strengthen
macro-fiscal capabilities in three areas: first, by accelerating the deepening of Qatar's capital markets and sources of funding;
second, expanding the government's revenue base; and finally, managing government expenditure efficiently.
"These measures will help to achieve the desired AAA credit rating, develop a business environment attractive to private and
international investors, diversify the economy, and ensure prudent management of governmental expenditure."
He said, "We see the outlook for the coming years is moving to a more sustainable level of growth, tighter fiscal discipline and
continued diversification of the economy.
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