1. Page 1 of 2
Economic Commentary
QNB Economics
economics@qnb.com.qa
July 6, 2014
Qatar’s Growth Momentum Picks Up Further
Qatar’s economy accelerated in the first
quarter of 2014, driven by strong growth in
construction, financial services and trade,
restaurants and hotels, according to figures
released last week by the Ministry of
Development Planning and Statistics (MDPS).
Qatar real GDP growth accelerated to 6.2% in
the year to Q1 2014 with the non-hydrocarbon
sector expanding by 11.5% owing to rapid
progress with the implementation of major
projects. The pickup in growth came despite a
1.2% contraction in hydrocarbon real GDP as a
result of falling crude oil production and flat
production at LNG facilities. QNB Group
expects real GDP growth to continue to pick up
during 2014 as hydrocarbon production
stabilizes and non-hydrocarbon growth
remains high. Overall, the new GDP data are in
line with our expectations for real GDP growth
of around 6.8% in 2014. In 2015-16, we expect
momentum to continue to gather steam owing
to the ongoing implementation of major
projects, with growth rising to an average of
7.7%.
Strong growth in the non-hydrocarbon sector
has been driven by a pickup in major
infrastructure investment projects since the
middle of 2013. This has led to rapid growth in
construction, which expanded by 19.6% in real
terms in the year to Q1 2014 and contributed
2.3% to overall growth. Rising project activity
has also led to a rapid increase in the number
of workers being employed in Qatar, pushing
up population growth to 11.6% in the year to
end-March 2014. In turn, this has helped boost
growth in services sectors. Services
contributed 4.2% to total real growth, with
sectors such as financial services and trade,
restaurants and hotels fairing particularly
well.
The data confirm the continued process of
diversification in Qatar away from
hydrocarbons. With hydrocarbon production
expected to continue plateauing in the medium
term, the non-hydrocarbon sector is projected
to play a more significant part in driving
growth in the economy.
Contribution to Qatar’s Real GDP Growth
(% in year to Q1 2014)
Sources: MDPS and QNB Group analysis
Looking forward, the continued
implementation of infrastructure projects
should maintain high non-hydrocarbon
growth. A number of major projects are well
underway, notably the new metro in Doha,
major real estate projects in and around Doha,
such as Musheireb in the center of old Doha
and Lusail to the North, and new roads,
highways as well as a further expansion of the
new airport. Completion of most of these major
projects is scheduled from around 2018. The
implementation of these projects is, therefore,
likely to continue to drive growth, directly
through higher investment spending, and
indirectly as an increasing number of workers
are attracted to work in Qatar. Based on
planned projects, QNB Group expects
1.3
0.6 Transport & Communications
Government Services
Trade, Restaurants &Hotels
Financial Services
-0.1
-0.5
2.3
1.7
0.9
6.2
Construction
Hydrocarbon
Other
Total

2. Page 2 of 2
Economic Commentary
QNB Economics
economics@qnb.com.qa
July 6, 2014
population growth to average 10.1% in 2014
and we expect it to remain strong going
forward to support infrastructure
development. Such high levels of job growth
should boost domestic consumption,
supporting the services sector and providing
further impetus to non-hydrocarbon GDP
growth. We expect growth in the non-
hydrocarbon sector to average 11.5% in 2014-
16.
Contacts
Joannes Mongardini
Head of Economics
Tel. (+974) 4453-4412
Rory Fyfe
Senior Economist
Tel. (+974) 4453-4643
Ehsan Khoman
Economist
Tel. (+974) 4453-4423
Hamda Al-Thani
Economist
Tel. (+974) 4453-4646
Ziad Daoud
Economist
Tel. (+974) 4453-4642
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