DOHA: Qatar expects the economy to contract this year amid low oil prices and the coronavirus crisis, after it shrank by 0.3% last year, Reuters has reported, citing a Qatar Central Bank report.
“Our initial analysis indicates that, if the conditions of dual stress continues for an extended period, real GDP growth will remain negative in 2020,” the report said.
In 2019 real gross domestic product contracted by 0.3% mainly because of a slowdown in the hydrocarbon sector, it said.
Last April, the International Monetary Fund (IMF) expected Qatar’s gross domestic product (GDP) to shrink by 4.3 percent during the year 2020, due to the damage caused by the spread of the Coronavirus, compared to a growth of 0.1 percent last year.
Meanwhile, in the World Economic Outlook, issued this week, the International Monetary Fund said Qatar’s economy will recover in 2021, growing by 5 percent.
Regarding inflation, the report indicated that it is likely to shrink to 1.2 percent, instead of 0.6 percent in 2019, with expectations of an acceleration in inflation rate growth next year by 2.4 percent.
The current account is likely to shrink by 1.9 percent this year, noting that it registered a growth of 2.4 percent in the previous year and that it will record a contraction of 1.8 percent in 2021.
In turn, Fitch Ratings confirmed Qatar’s long-term sovereign evaluation of the foreign currency at “AA-“, with a stable outlook in a report last June, despite its expectation that the country’s GDP will shrink by 3.8 percent during 2020.
The agency stated in a research note that the classification fixation reflects the strong position of net sovereign assets, along with a flexible financial structure, and a strong response to reduce the financial impact of the Coronavirus.