QATAR EFFECTIVELY ADJUSTING TO SUSTAINED LOWER ENERGY PRICES — IMF

WASHINGTON, Qatar is effectively adjusting to the new reality of sustained lower energy prices, but reduced hydrocarbon prices have adversely affected macroeconomic performance, the IMF said.

A concluding statement, released at the end of an IMF staff visit to the country, said, the Qatari policy response “has been adequate, underpinned by cuts to current expenditures and renewed efforts towards increasing non-oil revenues.”

Growth in Qatar slowed to 1.7 percent (year-on-year), during the first half of 2016, and inflation picked up, reaching 2.2 percent in Oct, 2016 (y/y), in part, due to higher domestic energy costs, the statement said.

Real gross domestic product growth in Qatar was expected to moderate to about 2.7 percent in 2016, and is projected at 3.4 percent in 2017, reflecting expansion in the non-hydrocarbon sector, due to World Cup-related spending and supported by added output from the new Barzan gas project.

The main external risk in Qatar remains the possibility of persistently lower energy prices, the statement said.

In addition, the prospects of further rises in the US interest rates may complicate efforts to bolster economic growth, it said.

Source: NAM NEWS NETWORK