Qatar Economy Seen Growing by 7.5%

Qatar is predicted to be among the fastest growing economies in 2010, as continued heavy investment in the hydrocarbon sector drives higher oil and gas output levels, a new report has predicted.

Research firm Business Monitor International said it sees see real gross domestic product growth averaging 7.5% from 2009-2013, with the most rapid expansion occurring in 2010 and 2011, when growth of 13.3% and 9.1% is predicted.

Both the government’s fiscal balance and the current account balance will remain firmly in the black over the entire forecast period, BMI added.

Analysts also said that it expects Qatar’s inflation rate, which turned negative in the second quarter of 2009 amid falling rents driving the consumer price index down, to remain weak through 2010.

BMI's report also said over the next five years, it expected the state "to play an increasingly important role in Qatar’s economy".

"We see the government continuing to pursue an expansionary fiscal policy, with a heavy focus on investment. As such, infrastructure will be an important growth area," the report added.

However BMI sees the country's real estate sector remaining "subdued for some time", while credit for businesses is likely to remain tight, at least into 2010.

"That said, the decision by the government to lower the corporate tax rate for foreign businesses to a flat rate of 10% could boost investment over the longer term," BMI added. - Business 24/7