Posted on July 24, 2018

Qatar British Business Forum hosted a Luncheon session on 23rd July, 2018 at Four Seasons Hotel Doha. The opening remarks were given by Mr. Emad Turkman, Chairman of Qatar British Business Forum. The forum was attended by key dignitaries and professionals from top corporates in Qatar. Dr.R. Seetharaman, the Chief Executive Officer of Doha Bank was the keynote speaker who discussed on “The impact of the blockade on the financial sector within Qatar, a year on”.

Dr. R. Seetharaman spoke on Global economy, he said “Although the Global growth for 2018 and 2019 is projected at 3.9 percent by IMF in July 2018, IMF expects short term and medium risks erupting from trade war which can erode 50bps from global growth by 2020. Advanced economy growth is expected to remain above trend at 2.4 percent in 2018 before easing to 2.2 percent in 2019. The forecast for 2018 is lower largely reflecting greater-than-expected growth moderations in the euro area and Japan. In the United States, near-term momentum in the economy is expected to strengthen with growth projected at 2.9 percent in 2018 and 2.7 percent in 2019. Germany, France and Italy growth was revised lower for 2018 amongst the European economies. Japan and UK growth was also revised lower for 2018. India, Brazil and Mexico forecasts were also lowered for 2018 by IMF in July 2018 report.

Dr. R. Seetharaman, Chief Executive Officer of Doha Bank, said that IMF expects Qatar to report GDP growth of 2.6 percent and 2.7 percent in 2018 and 2019 respectively. Qatar’s banking system needs no further support from the central bank and sovereign wealth fund as the decline in non-resident liabilities of lenders have subsided, according to the International Monetary Fund (IMF). As per Moody’s, Qatar injected US$38.5BN of its US$340BN reserves into economy to cushion the impact on account of embargo.

Qatar has made alternate arrangements for supplies, the Omani port was used for shipping supplies and Doha’s own port was also opened successfully. The 2018 budget assumes the same conservative oil price of $45/barrel as used for the 2017 budget. Revenue reach QR175.1 billion, up by 2.9 percent, compared with 2017, mainly due to an expected increase in non-oil revenue. Spending is expected to total 203.2 billion riyals ($55.8 billion), up 2.4 percent from the budget plan for 2017, with the deficit declining 1.1 percent to 28.1 billion riyals.

The deficit will be financed through the issuance of debt. Total allocations for health, education and transportation reached QR83.5 billion or 41 percent of total expenditure.  Allocations for the health sector were QR22.7 billion, representing 11.2 percent of the total expenditure in 2018. The education sector is witnessing a major expansion with a total allocation of QR19.0 billion in the 2018 budget, up by 19 percent compared to 2017. The transportation and other infrastructure projects were assigned the largest share in the 2018 budget with allocations of QR42.0 billion, 21 percent of total expenditure.

Major projects will have a whopping QR93bn set apart in Qatar’s budget for 2018. “Fitch ratings recognized support of Qatari authorities for banking system in Qatar. The government has demonstrated a strong commitment to its banks and key public sector companies, which has been reaffirmed during this crisis. Qatar had shown buoyancy in the times of crises and this upgrade was testament of its fundamental strength. In response to the economic blockade Qatar has emerged strong and has brought various reforms to transform itself into a self-reliant economy. Some of these reforms include landmark residency bill, relaxing entry visa requirements for citizens of 80 countries and enhancing food security. Qatar will also raise LNG production by 30 percent to 100mtpa within five to seven years after lifting a moratorium on gas development earlier in 2017.

Dr. R. Seetharaman spoke on UK Economy, he said “IMF revised UK economy to grow lower by 1.4 percent in 2018 and pick up to 1.5 percent in 2019. IMF also expects the UK to report Current account deficit of 3.8 percent and 3.4 percent in 2018 and 2019 respectively. The total bilateral trade between Qatar and UK amounted to GBP5BN in 2016. There are more than 79 UK companies operating in the field of Oil & Gas, infrastructure and information technology. UK can be partner in Qatar’s FIFA 2022 World Cup projects, especially in stadium and cyber security. Qatar’s resilient model is a bigger opportunity in bilateral terms.