Today, Qatar’s 619,000 citizens enjoy one of the world’s best standard of livings (highest in the Middle East) due to the country’s immense oil & natural gas wealth. The oil & gas economy consist of a significant proportion of the Qatar economy as energy exports are valued at 85 percent of national export earnings. Qatar holds one of the world’s largest reserves of natural gas at 25.7 trillion cu m (2004). Current measured oil reserves for Qatar stand at 15.2 billion barrels with daily output at 755,000 bpd (2005).
Economic Statistics
Total GDP as measured by market prices was recorded at approximately $28.45 billion USD (2005) with corresponding GDP/Capita at $45,953 USD. Real GDP growth rates have year 2005 projected at 5.5 percent, 2006 at 7.1 percent. Inflation quotes include year 2005 estimated at 3 percent, 2006 at 2.7 percent, 2004 at 3 percent, 2000 inflation was low at 1.7 percent, 1999 at 2.2 percent. Unemployment is low with year 2001 recording 2.7 percent. Current account was in deficit at $2.3 billion USD for year 1998 at a time of very low oil prices although this has now reversed to a massive surplus. The trade surplus for 2004 came in at $9 billion USD. External debt at $18.5 billion USD. Foreign exchange reserves including gold stand at $3.35 billion USD (2004). Repo interest rate at 4.85 percent.
CURRENCY: ISO Symbol ‘QAR’, Qatari riyal. At time of review on November 4, 2005, the Qatari riyal remained fixed to the US-dollar (USD) at 3.64 riyals.
CURRENCY HISTORY: riyal fixed to the USD since 1980 with a hard peg at 3.64 QAR Independence was achieved for Qatar in 1971 from the United Kingdom. Shortly thereafter in May 1973, the Qatari riyal was introduced as new national currency then pegged to gold briefly followed by a peg to the IMF’s special drawing rights in 1975. Prior to nationhood, the joint Qatar-Dubai riyal (QDR) was in circulation.Up until 1966, currencies that were pegged to the UK pound sterling circulated in Qatar such as the Indian rupee, followed by the Gulf rupee.
CURRENCY FORECAST: long term development of large offshore natural gas reserves coupled with the potential to greatly increase natural gas exports. The world is in the midst of an energy boom providing Qatar with surplus revenues, BankINTRO.com forecasts living standards for Qatar to continue to improve. Also expect a revaluation of the riyal to a stronger valuation (that is to appreciate to a level of 2.5 to 3 QAR to the USD) in the months ahead and/or a new peg adjustment to the Euroland euro (EUR) or a basket of currencies. Europe is Qatar’s largest trading partner, hence a EUR peg maybe in their best interest considering a forecasted depreciating USD will most likely increase domestic inflation within Qatar. The USD remains vulnerable in the latter half of year 2006.
External risks are prevalent such as potential volatile scenarios for Saudi Arabia, Iran and Iraq. The Qatar government is implementing policies to diversify the economy into petrochemicals, liquefied natural gas and other industries outside of petroleum based including that of tourism. In the meantime, a domestic consumption boom will remain with new property developments (ie. international airport) actively taking place with Qatar’s increasing wealth.
