Qatar 2021: Economy pulls off a remarkable feat despite incredible headwinds

Despite the repercussion of the COVID-19 pandemic, which continued to threaten the world’s economies during 2021, the Qatari economy recorded a remarkable positive performance at various levels due to rational policies, a flexible economic approach to crisis management, and forward-looking plans, which enhanced Qatar’s ability to quickly recover and adapt to changes, ensure business continuity and complete vital projects in the infrastructure sector and other sectors.
It was not surprising that Qatar ranked first in the Gulf region in COVID Economic Recovery Index, scoring four points, according to the global economic magazine ‘MEED’ published last August. The index confirmed that Doha is the holder of the highest score in the economic recovery index, as its revenues depend mainly on natural gas, not oil, making its financial position more robust.
This economic and financial performance was reflected in the reports of credit rating institutions, as the country maintained its high rank in credit ratings and a stable future outlook for its economy, based on its financial position, which provided it with protection from potential risks, as well as the continuous development of the energy sector.
In its latest reports, the World Bank also expected that the Qatari economy would grow by 3 percent in 2021 and accelerate its pace by 4.1 percent in 2022 and 4.5 percent in 2023 after absorbing the shocks caused by the pandemic and returning again to the growth trend.
The quarterly figures indicate that the country’s GDP achieved remarkable growth in the 2nd quarter of 2021 at a rate of 5.4 percent, 156.3 billion riyals, compared to 148.3 billion riyals in the 1st quarter.
The contribution of the oil and gas sector accounted for 36.8 percent, a growth of 11 percent, while the total non-oil sectors accounted for 63.2 percent, with a growth rate of 2.4 percent.
The industrial sector, which is one the main forces of development, witnessed remarkable growth after its contribution to the GDP increased from 7.3 percent in 2020 to 8.7 percent in the first half of 2021, to occupy the fourth place as the highest contributing activity to the country’s economy during the current year. This reflects the efficacy of the measures taken by the State that supported the growth of various vital economic sectors in light of the steady steps towards achieving economic diversification in accordance with the determinants of the National Development Strategy and Qatar National Strategy for Manufacturing Industry 2018-2022.
In another indicator that reflects the positive movement of the economy, Qatar’s trade balance during the 3rd quarter of 2021 achieved a surplus of 57.8 billion riyals compared to the third quarter of 2020, when it reached 19.6 billion riyals.
The total value of Qatari exports (including exports of local goods and re-exports) during the mentioned period amounted to 82.6 billion riyals, an increase of 41.5 billion riyals, or 101.0 percent, compared to the same period last year, which recorded total exports of 41.1 billion riyals, and an increase of 11.7 billion riyals, or 16.5 percent, compared to the second quarter of this year.
The value of Qatari imports during the mentioned period amounted to 24.8 billion riyals, an increase of 3.3 billion Qatari riyals or 15.3 percent compared to the third quarter of 2020, which amounted to 21.5 billion riyals, and a slight decrease from the second quarter of this year.
In an indication of the extent of the continuous recovery of the manufacturing, services and construction sectors during the year 2021, the latest PMI data of the Qatar Financial Center showed a record improvement in the commercial activity of non-energy private sector companies in October 2021, as they recorded an increase for the fifth month in a row, by about 62.2 points, from 60.6 points in September of the same year.
The record rise in the overall commercial activity growth rate indicates strong growth rates in all four major sectors, namely services, retail and wholesale, manufacturing and construction.
In a related context, a report by the Qatar Chamber showed that the value of private sector exports, until the end of the 3rd quarter of this year, amounted to about 20.9 billion riyals, compared to 11.1 billion riyals for the same period last year, achieving a record increase of more than 88 percent.
Last September, exports recorded a record rise of about 4.98 billion riyals, an increase of more than 350 percent on an annual basis compared to the same month of the year 2020, when they recorded about 1.09 billion riyals. Exports also increased by 164 percent on a monthly basis compared to last August, in which the value of exports amounted to 1.89 billion riyals.
According to the data, the level of exports, at a value of about 1.95 billion riyals at the time, increased by 155 percent, and increased, by a large percentage of more than 771 percent, from the lowest level reached by exports and that was in April of the year 2020 that witnessed the implementation of precautionary measures, which amounted to about 572 million riyals only.
In 2021, the State of Qatar has strengthened its leadership position in the international energy markets and established itself as one of the most important suppliers of clean energy in the world. In this context, Qatar Petroleum announced the change of its name to Qatar Energy to reflect the major transformations in the energy industry locally and in line with global trends.
The company has signed agreements to build more than 100 new gas tankers until 2027, in parallel with a contract for the first phase of its North Field expansion project, which will raise the country’s production of liquefied natural gas to 110 million tons annually by 2025 and in light of the efforts to raise its production of liquefied gas to reach 126 million tons annually by 2027.
Qatar Energy has also signed, during current year, several agreements to carry out marine exploration operations off the Egyptian, Canadian, Cypriot and Namibian coasts and in two marine areas in the Republic of Suriname. It also signed a number of agreements to supply a number of countries with Qatari gas, including China, Pakistan and Bangladesh.
In 2022, the budget of expenditures in Qatar will be 204.3 billion riyals, while the total estimates of revenues in the budget (fiscal year 2022), amounted to 196 billion riyals, which represents an increase of 22.4 % compared to the estimates of the 2021 budget, while the new budget estimates the deficit of about 8.3 billion riyals. 17.8 billion riyals have been allocated to the education sector, or 8.7% of total expenditures, and 20 billion riyals have been allocated to the health sector, representing 9.8% of total expenditures.
Economists expectations indicate that the State of Qatar is able to overcome the deficit in the 2022 budget, based on its rational financial policy and the strength of its economic performance, especially as it succeeded during the first nine months of 2021 in exceeding the expected deficit, and recorded a surplus of about 4.9 billion riyals. Total revenues amounted to 47 billion riyals in the third quarter, an annual growth of 20.6 %, compared to expenses amounting to 46.1 billion riyals.
The data of the states general budget for 2022 confirms the extent of the commitment to continue the balanced economic approach that seeks to promote economic diversification by activating the various data in the economic structure, while responding to the interim benefits in light of the completion of the World Cup projects, as well as the projects programmed in various sectors and on which the Second National Development Strategy (2018-2022) focused on.
In 2021, the country continued to complete its various major projects in the field of infrastructure, according to pre-prepared plans and strategies. Infrastructure projects, the development of citizens’ lands, and public services development projects, including health and education, received priority spending, and the cost was estimated at more than 72 billion riyals.
Among the most important infrastructure projects in 2021 is the opening of the “Sabah Al-Ahmad Corridor”, which represents an important addition to the road transport network in Qatar and a major link between the south and north of the country through the city of Doha.
All roads were also opened to traffic, as part of the fourth package of the Roads and Infrastructure Development Project in the Industrial Area in Doha, in addition to the opening of the seventh bridge at Umm Lekhba Interchange (Landmark), the second highest bridge in Qatar with a length of one kilometer within the works of the Sabah Al-Ahmad Corridor project, and other similar projects that come within the framework of providing an integrated infrastructure, advanced road network and service facilities throughout the country.
The state of Qatar continues to develop the internal road network, the sewage network, and the surface water drainage network. This year, it completed the implementation of a 7.2 km long surface water drainage network. This network is connected to another network with a length of 4.4 km. The combined length of the two networks is 11.6 km, as well as the completion of 3.2 km of treated wastewater lines.
A project to rehabilitate and develop four sewage pumping stations has also been completed, in addition to completing the project to establish and operate a sewage network in the inner Doha regions (Package 1), as well as the main works to provide 2,112 plots of citizens’ lands, in the northern regions and northern Nasiriyah, with an integrated infrastructure.
In the agriculture, livestock and fisheries sector, recent years have recorded a remarkable growth in the register of breeders, shepherds and the size of the herd by increasing the number of holders and the number of heads that are raised. The national program for honey bees was launched, and farmers were trained in beekeeping. 11 meadow were rehabilitated, in addition to fixing the work in the yards selling vegetables from the local product (Al Mazrooah – Al Khor – Al Dhakhirah – Al Wakra) for a period of 7 months from the Nov.1 until the end of May of each year, and adopting programs to market distinctive Qatari vegetables, including the local date festival and the Qatar’s International Agricultural Exhibition (AgriteQ).
In the field of fisheries, the State has paid great attention to fish farming as one of the most important pillars of the national development strategy, as it completed the establishment of the Aquatic Fisheries Research Center, which represents the core of the establishment of many small and medium projects for fish farming, as a public bid was launched for investors to establish projects for fish farming.
The Animal Production Research Station was established and operated in Al Shahaniya, which is specialized in conducting studies and research related to developing animal production techniques and improving the economic profitability of the sector, in addition to improving and preserving genetic specifications, as well as equipping Al Ghashamiya research station for the production of pastoral plants, and the completion of the designs for the Agricultural Research Center in Al Mazrooah.
As for the public services sector, it has also witnessed important and unprecedented achievements, especially with regard to the completion and development of a number of public parks in the country, as 51 parks were opened and rehabilitated out of 94 parks covering different regions of the country, including 40 parks in the city of Doha, 20 parks in Al Rayyan, 6 parks in Al Wakra, 7 parks in Al Khor and Al Dhakhirah, 7 in Al Daayen, 5 in Al Shamal, 6 in Umm Salal, and 3 parks in Al Shahaniya.