Qatar’s fiscal balance to GDP forecast at 9.6% this year and 7.6% in 2024: Oxford Economics

Qatar’s fiscal balance as a percentage of the country’s GDP has been forecast at 9.6% this year and 7.6% in 2024, Oxford Economics said in its latest update.The country’s current account balance (as a percentage of its GDP) has been forecast at 16.8% this year and 13.8% in 2024.Qatar’s inflation, Oxford Economics noted, is expected to be 2.3% this year and 1.8% in 2024."We expect disinflation to gather pace in the coming months and continue to forecast average inflation at 2.3% this year. This is less than half the average pace of 5% in 2022,” Oxford Economics said.Real GDP, the researcher noted, may grow 2.5% this year and 2.7% in 2024.In its forecast last month, Oxford Economics said it expects the expansion of gas capacity and the pipeline of planned projects to draw foreign direct investment (FDI), underpinning average growth of 3.2% in the non-oil sector this year and next.The North Field gas expansion project will have a positive medium-term impact, increasing LNG capacity nearly 65% to 126mn tonnes per year (mtpy) by 2027, from 77mtpy currently.Qatar is in the process of signing further multi-year supply contracts following agreements with China and Germany for LNG output set to be added in the first phase of the project due in 2026.The non-oil sector is likely to have expanded by over 6% in 2022, the fastest pace since 2015. But non-oil growth will slow to 3.3% this year as momentum eases after the World Cup, and 3% in 2024.Tourism will be among the sectors that will underpin non-oil recovery this year, thanks to major events, including the Asian Football Cup and Formula 1 Qatar Grand Prix, and in the medium term.Qatar attracted 2.56mn tourists in 2022, and data for January and February show foreign arrivals were about three and four times higher than in the respective months last year.The 2023 budget, based on an oil price $65 per barrel, up from $55 in the 2022 budget, projects a surplus of QR29bn, equivalent to 3.4% of GDP.Oxford Economics’ forecast for Brent is at $85 per barrel in 2023, above the budgeted price, and it now sees a "slower deceleration" in LNG prices.On that basis and with spending growth moderating, the researcher sees a budget surplus of 10.3% of GDP this year.The government ran a surplus of QR89bn (10.7% of GDP) in 2022, Oxford Economics said.