In its latest ‘Qatar Equity Strategy Alert’ QNBFS said the FIFA World Cup Qatar 2022 has created platform for logistics sector growth and economic diversification.
Real GDP growth of the country’s logistics sector was at an average of 5.9% from 2015-2019 before dropping by 34% in 2020 and has recovered with a growth of 10.9% in 2021.
In nine months of 2022, the country’s logistics sector witnessed the highest growth of 26.7% among the prominent economic sectors.
“The high growth in the sector can be attributed to the gigantic logistics requirements in hosting the hugely successful FIFA World Cup Qatar 2022. The highly successful global sporting event has created a solid platform for the both economic growth and diversification, with the logistics sector contributing to 4.2% of the overall economy for the nine months of 2022 growing from a 3.7% contribution to the economy in 2015,” QNBFS noted.
According to QNBFS Qatar has emerged as a “global air cargo hub” on the back of Qatar Airways’ rapid expansion.
In this area, Qatar climbed up the world rankings to 6th in 2021, from 17th in 2014 with over 2.58mn metric tonnes in international freight cargo moving through Doha’s Hamad International Airport.
Qatar’s emergence and rapid growth trajectory as a global air cargo hub has been achieved through its incredible cargo tonnage increase in recent years.
Air cargo tonnage has increased from 0.98mn tonnes in 2014 to over 2.58mn tonnes in 2021.
Qatar had an air cargo growth of 20.7% in 2021 and an average growth of 15.5% from 2014-2021.
GWC, the official logistics provider for the most successful edition of the FIFA World Cup, holds strong potential as logistics needs rise with Qatar’s increasing air cargo growth, QNBFS noted.
The state budget overall expenditures for 2023 showed a slight decline in spending by 2.6% to QR199.0bn.
The main reason behind this drop was a budgeted cut by 13.6% in allocations for major projects, resulting from the completion of many planned infrastructure and strategic projects, including the expansion of the Hamad International Airport before the start of the FIFA World Cup Qatar 2022.
For the nine months of 2022 actual government spending increased by 13.3% compared to the same period in 2021, QNBFS noted.
"The sky is the limit for a geographically prime-located country on a quest to become the preferred global air and maritime logistics hub, linking the east and the west," QNBFS said.
Qatar is pursuing a dual strategy that has potential spin-offs on various QSE-listed logistics players.
First, anchored by Qatar Airways – world's best airline (as ranked by Skytrax for an unprecedented 7th time in 2022) and largest air cargo carrier in the world, with a rapidly expanding cargo tonnage capacity enabled by its ballooning fleet size and focused expansion on the cargo business – Qatar has emerged as a global giant in air cargo transportation.
Now ranked 6th globally in the air cargo rankings, the country’s emergence has been years in the making, with its air cargo volume rising 2.6 times between 2014 and 2021.
All this, despite facing trade route restrictions and embargoes during the blockade that Qatar managed to outmanoeuvre, even flying in 4,000 cows to speedily achieve dairy self-sufficiency. Second, going forward Qatar’s position as a leading global LNG producer and shipper will be cemented by its ongoing LNG expansion mega-project.
“These enviable milestones would not have been possible without a visionary government policy to invest in developing global-scale logistics infrastructure as part of its economic diversification strategy.
“Dividends are beginning to show and during the first nine months of 2022 the logistics sector saw a whopping 26.7% real GDP growth, partly driven by the colossal requirements of the FIFA World Cup Qatar 2022, witnessing the highest growth among other prominent sectors of the economy,” QNBF said.
In the coming years, contribution of the logistics sector to the economy could more than double from 4.2% in 2022 to nearly 10% as it outpaces growth of the overall economy, QNBFS added.
