Qatar’s fiscal balance to GDP seen at 8.7%; 2.7% y-o-y real GDP growth in 2023: Oxford Economics

Qatar’s fiscal balance as a percentage of GDP is seen at 8.7% this year, even as researcher Oxford Economics estimates the country’s real GDP growth at 2.7% year-on-year (y-o-y) in 2023.The country’s current account balance as a percentage of GDP has been estimated at 14.3%.Inflation this year will drop to 2.5% from 4.6% in 2022, Oxford Economics said in a report yesterday. In 2021, Qatar recorded an inflation of 2.3%.Last year, Qatar’s GDP is estimated to have grown at 5.2% year-on-year while in 2021 it stood at 1.5%, the researcher noted. Fiscal balance as a percentage of GDP was estimated at 9.6%. In 2021, Qatar’s fiscal balance as a percentage of GDP was only 0.2%.The country’s current account balance last year stood at 17.3% and 14.7% in 2021.Qatar's headline PMI rose slightly to 49.6, indicating the subsiding effects of the FIFA World Cup, it said.Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.Oxford Economics estimates the non-oil economy to lead GCC regional growth, rising by 4% in 2023.The GCC, the researcher estimates will achieve a real GDP growth of 2.9% in 2023, albeit much lower than the 7.3% achieved in 2022.In 2021, the region’s real GDP growth stood at 3.1%, Oxford Economics noted.The PMIs for both Saudi Arabia and the UAE eased to 56.9 and 54.2 in December, respectively, owing to slower output and new order inflows, the researcher said."That said, activity in both economies remained in the expansionary zone, indicating that the outlook remains positive. Job creation in the Kingdom was the strongest in five years, but demand-side inflation inched higher,” Oxford Economics said.Oman has formally announced its 2023 budget. Based on an oil price of $55 per barrel, revenues are pencilled in at OMR10.05bn, and expenditures are expected at OMR11.35bn.This will move the budget account into a deficit of OMR1.3bn, or 3% of the GDP, after witnessing a surplus of OMR1.15bn in 2022. The government also highlighted that the budget surplus helped reduce the public debt from OMR20.8bn in 2021 to OMR17.7bn in 2022."We forecast a much narrower gap, which balances expectations of lower oil production than assumed in the budget with higher expected oil price than the budgeted $55. Support for households will be maintained, while further non-oil revenue generating reforms, including the mulled income tax, look set to be delayed,” Oxford Economics noted.