Qatar Economy Shrinks by 29.7% Year-on-year

 

Qatar’s economy shrank 29.7% year-on-year (y-o-y) in the second quarter (Q2) of this year mainly on falling hydrocarbon prices, especially liquefied natural gas (LNG), and the manufacturing sector, according to the Qatar Statistical Authority.

The country’s nominal gross domestic product (GDP), a measure of the value created by the productive activity of resident institutional units, fell 4.3% in Q2 compared to the previous quarter of this year as LNG prices were down 31%, even as oil prices gained 36% during the review period.

Although the country’s oil sector witnessed 36.1% growth in Q2 compared to first Q1 of this year; it had reported 50.6% shrinkage against Q2 of 2008.

One of the highlights of the Q2 was the average price of crude oil rose from $44 per barrel to $60; implying more than 36% growth; while production remained virtually unchanged, the QSA said.

The country’s gas sector saw a decline of 19.6% in Q2 (compared with Q1) and it was 51.8% slippage y-o-y from Q2 2008.

“LNG prices declined by an overall 31% in line with international pressures on the LNG industry as a result of the 2008 financial crisis.

“Oil price recovery offset the decline through raised prices for condensates,” the statistical authority said.

Services incidental to oil and gas extraction grew by 2.5% in Q2 (against Q1) but reported 29.3% fall from the Q2 of 2008.

However, quarrying of stone, sand and clay reported 6.2% increase in Q2 (compared with Q1) and 32% y-o-y.

Thus, the mining and quarrying sector reported 2.5% quarter-on-quarter (q-o-q) growth in Q2 but registered 50.2% decline y-o-y in Q2.

The country’s manufacturing sector declined 4.7% q-o-q in Q2 “due largely to the effects of the 2008 financial crisis” and reported 38.2% dip y-o-y.

Utilities sector however witnessed a growth of 15.6% (q-o-q) and 21.6% (y-o-y) with electricity generation having increased “significantly” in the quarter due to demand from major projects, the QSA said.

Finance, Insurance, Real Estate and Business Services grew 5.3% (q-o-q) and 34.6% (y-o-y) and imputed bank service charges by 4.7% and 33.7% respectively.

Transport and Communications rose 3.8% q-o-q and 16.8% y-o-y; while Trade, Restaurant and Hotels grew 0.5% and 4.7%, respectively.

The construction sector reported 2.6% growth q-o-q and 17.3% y-o-y, mainly “due to the ongoing investment in Qatar in major projects,” the statistical authority said.

Agriculture and Fishing sector registered a growth of 1.5% q-o-q and 3% y-o-y and Social Services sector grew 0.2% and 23.5% respectively.

Although government services shrank 33.1% q-o-q in Q2; it had reported 17.6% gain y-o-y; while the import duties had fallen 9.6% and 1.5% respectively.