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Qatar is expected to post a fiscal surplus of 6.5% in 2023 and 5.3% next year, the World Bank has said in its latest report.The country’s current account balance (as a percentage of GDP) will be 15.9 this year and 12.1 in 2024, the report noted.Qatar's real GDP growth has been forecast by World Bank at 3.3% this year and 2.9% in 2024.World Bank economists forecast that the Mena region will grow by 3% in 2023 and by 3.1% in 2024, much lower than the growth rate of 5.8% in 2022.2“The Mena average growth rate masks the stark differences across countries,” the World Bank noted.In the Gulf Co-operation Council (GCC) — Qatar, Kuwait, Oman, Saudi Arabia, United Arab Emirates, and Bahrain — growth is expected to decelerate from 7.3% in 2022 to 3.2% in 2023, driven by the expected decline of oil prices from the highs reached in 2022. Developing oil exporters are forecast to grow at 2.2% in 2023, a deceleration from their 3.9% growth in 2022.Developing oil importers are expected to grow by 3.6% in 2023 and 3.7% in 2024 — although this is largely driven by Egypt’s relatively high expected growth. Setting Egypt aside for a moment, other developing oil importers are expected to grow by 2.8% and 3.1% in 2023 and 2024 respectively.Changes in real GDP per capita are arguably a more accurate measure of changes in living standards. Following a recovery of 4.4% in 2022, growth in real GDP per capita for Mena is expected to decelerate to 1.6% and 1.7% in 2023 and 2024 respectively, the report said.The slowdown in growth will be experienced across the region, but more acutely in the GCC. GDP per capita growth for GCC countries is expected to decelerate from 5.5% in 2022 to 1.8% in 2023 and 2% in 2024.For developing oil exporters, the corresponding rates are 0.8% in 2023 and 1% in 2024. For developing oil importers, GDP per capita is expected to grow 2.1% in 2023 and 2.2% in 2024, World Bank said.Food price inflation reached double digits for most of the middle-income and low-income Mena economies in 2022, the World Bank noted.For most Mena economies, food price inflation is “much higher” than headline inflation. In fact, food inflation accounts for about half or more of headline inflation in many countries in the region, even though food’s weight in the consumer price index (CPI) is typically around 25%.Importantly, the data indicate that that poorer households in December 2022 experienced about 2 percentage point more inflation (year-on-year) than rich households on average in the Mena region.Countries whose currency depreciated vis-à-vis the US dollar also experienced higher levels of inflation in Mena. After accounting for exchange rate fluctuations, inflation in most Mena countries was moderate or low, indeed lower than the levels seen in the United States.When faced with rising prices in commodity markets, in particular oil and food, countries in Mena put in place policies aimed at containing domestic inflation. Despite these efforts, food inflation in most Mena economies increased since the war in Ukraine and indeed was higher than headline inflation. Increases in the price of food products accounted for half or more of the headline inflation, World Bank noted.

Opec production cuts are expected to weigh on GCC growth in 2023, Emirates NBD said and now forecasts region’s headline GDP growth at 2.3% for 2023, down from 3.2% previously.The biggest voluntary cuts will come from Saudi Arabia, which will reduce oil production by 500,000 barrels per day (bpd) from May. If the cuts are maintained through the end of 2023, average crude production this year will decline by more than 4% from 2022 levels.While investment in boosting capacity in the oil and gas sector will continue, Emirates NBD now expects overall hydrocarbon GDP to decline by -2.0% in 2023 against a previous forecast of 2.0% growth.With the non-oil sector growth estimate unchanged at 4.8%, headline GDP for the kingdom will likely reach 2.1% this year, a full percentage point lower than we had previously expected.The UAE indicated it would voluntarily cut crude oil production for 2023 by 144,000 bpd from May, which would also result in a decline in average output this year relative to 2022.However, the UAE has brought forward planned investment in oil and gas capacity in order to reach 5mn bpd by 2027 rather than 2030, which will support growth in the hydrocarbons sector even as crude production declines.“At this stage, we still expect oil and gas GDP to contribute positively to overall growth, although to a smaller extent than previously envisaged. As a result, we have revised our 2023 UAE GDP growth forecast down to 3.4% from 3.9% previously, with our forecast for non-oil sector growth remaining unchanged at 3.5%.“Similar adjustments to hydrocarbon sector growth forecasts for Kuwait and Oman result in downward revisions to headline GDP growth to 0.2% (previously 2.4%) and 1.7% (previously 2.8%) respectively, again with no changes to non-oil sector growth estimates at this stage,” Emirates NBD said.Emirates NBD said it had already revised its forecasts for GCC budgets lower on the back of its downward adjustment to the 2023 oil price estimate a couple of weeks ago.Reducing the amount of oil produced and sold will further negatively impact budget revenues for oil exporting countries.For the whole GCC, the forecast budget surplus for 2023 is now 1.8% of GDP from 2.5% previously. It now expects Saudi Arabia to run a close to balanced budget, while Kuwait is likely to post a small deficit of -0.3% of GDP. The UAE’s forecast surplus has been reduced to 5.6% of GDP from 6.2% of GDP previously.With fewer barrels of oil produced this year, the break-even oil price (the oil price required on each one in order to balance the budget) rises as well, unless government spending is reduced proportionately or non-oil revenues increase.The UAE’s breakeven oil price is not easy to estimate as revenues are split into tax and non-tax revenue (not oil and non-oil). However, the researcher thinks the UAE’s break-even oil price in 2023 is likely to be between $60-65/barrel, the lowest in the GCC.Current account surpluses have also been adjusted to reflect lower volumes of oil produced and exported relative to expectations at the start of the year.All GCC countries are still expected to run current account surpluses in 2023, with the weighted average for the region at 12.5% of GDP this year, down from an estimated 16.8% in 2022, Emirates NBD noted.

The deal value of liquefied natural gas assets in 2022 climbed 15% year-on-year (y-o-y) to reach $23bn, driven by Qatar’s LNG development, Doha-based Gas Exporting Countries Forum has said in a report.Qatar’s North Field expansion project accounted for 43% of the growth in LNG deal value, GECF said in its ‘Annual Gas Market Report 2023’.According to GECF, merger and acquisition (M&A) activity in the upstream sector declined to $154bn in 2022, 21% lower y-o-y, and below pre-pandemic levels.This decline was essentially driven by the continued impact of Covid-related lockdowns particularly in China, high oil and gas price volatility and escalating geopolitical tensions in Europe. Most regions experienced a sharp decline except for the Middle East and Africa.In the Middle East, M&A activity increased by 46% y-o-y, while in Africa the deal value more than tripled compared to the previous year to reach a record $24bn.North America accounted for almost 50% of asset and corporate acquisitions in 2022 amounting to $72bn, with private companies responsible for a large share of divestment as they opted to maximise their assets amidst the high price environment.Europe and Africa accounted for 17% and 16% of M&A activity respectively, where high commodity prices increased the value of traded producing resources and spurred buying and selling activity.In addition, a significant increase in demand for gas and LNG assets was observed in the midst of heightened concerns about energy security.In 2023, upstream M&A activity is likely to be remain around 2022 levels or increase.Furthermore, global energy security concerns are likely to drive investment for gas and LNG assets, and more so, increase acquisitions by European majors in Africa and theMiddle East to secure production assets.Additionally, net-zero emission targets may also support demand for gas and LNG assets as the cleanest burning fossil fuel.According to GECF, oil and gas investment has increased by 7% y-o-y to reach $718bn, partly due to higher petroleum services and EPC costs.In 2023, oil and gas investment is expected to rise further, on the back of greater investment in the upstream industry and LNG import terminals.However, several looming uncertainties, including a slowdown in global economic growth, tight financial conditions, inflation, and high energy price volatility may deter investment, GECF noted.

Oil and gas investment increased by 7% y-o-y to reach $718bn in 2022 and is expected to rise further in 2023, but looming uncertainties may deter investment, the Gas Exporting Countries Forum said in its fourth edition of its Annual Gas Market Report Wednesday.In 2023, oil and gas investment is expected to rise further, on the back of greater investment in the upstream industry and LNG import terminals.However, several looming uncertainties, including a slowdown in global economic growth, tight financial conditions, inflation, and high energy price volatility, may deter investment, GECF noted.Spot gas and LNG prices in Europe and Asia reached record highs in 2022, with significant volatility throughout the year. This, the report noted, was mainly due to a tight LNG market as Europe's LNG demand surged to replace lower pipeline gas imports.In 2022, the Title Transfer Facility (TTF) spot gas prices in Europe averaged $38/MMBtu, 136% higher y-o-y, while Northeast Asia (NEA) LNG spot prices averaged $33/MMBtu, a 79% increase y-o-y.This shift in prices made Europe the premier LNG market for suppliers, as TTF spot prices maintained a high premium over Asian LNG spot prices. In 2023, spot prices are expected to remain volatile.Factors such as a relatively mild winter, high gas storage levels in Europe, and weakened gas demand growth in the midst of a slowdown in global economic growth may exert downward pressure on spot prices.However, there may be some upward pressure on spot prices this year due to the anticipated recovery in China’s gas demand,higher imports in price-sensitive countries in Asia Pacific, and a rebound in gas demand in the industrial sector.Additionally, any further supply disruptions or extreme weather conditions during the year may also boost prices, GECF said.Energy security concerns took precedence over climate change mitigation goals in 2022, with policymakers focusing on meeting the energy needs of their people, the report said.Following a record rebound in 2021, global gas consumption declined in 2022, but is expected to resume growth in 2023 and reach an all-time high level, with the power generation sector remaining the largest consumer of gas.US, China, and some emerging countries in Asia Pacific are forecasted to drive the growth of global gas consumption in 2023, it said.GECF secretary-general Mohamed Hamel said, “The Annual Gas Market Report is comprehensive and I hope it will become an essential tool for anyone interested in natural gas.”The publication comes at a time when natural gas markets are undergoing fundamental transformations in terms of physical flows, investment, trade, and market functioning."The developments in the gas industry are an indication of the bright prospects for the expansion of the global gas industry, as natural gas is set to play a pivotal role in socio-economic development and towards just and inclusive energy transitions," Hamel added.

Qatar's giant North Field East LNG liquefaction project is expected to capture and store 2.9Mt CO2 per year, the Gas Exporting Countries Forum said Wednesday.The International Energy Agency (IEA) estimates carbon capture, utilisation and storage (CCUS) investments to reach $1.8bn in 2022, followed by a sharp increase over the next two years to reach $40bn by 2024.The past few years have witnessed an escalation in the language of climate change and CCS projects are at the heart of it as part of a reliable decarbonisation pathway.Since the start of 2018, momentum behind CCS has been growing which is translated into a significant rise in announced CCS projects and the associated carbon abatement capacity.As of 2022, about 200 new carbon capture projects have been announced under different stages of development, with aggregated capturing capacity of around 240tonnes carbon dioxide per year.This represents a 44% increase compared to the number of projects in 2021 and evidence of the increased interest in CCS as a pathway for achieving emissions reduction, while supporting at the same time economic growth and a just transition.Currently, there are around 30 operational facilities applying CCS on commercial scale to industrial operations, power generation and fuel transformation.On the other hand, there are CCS projects that are in different phases of developments, with 75 projects in early development phase, some 78 projects in advanced development phase and 11 projects under construction.However, in 2022 only 19 commercial CCS projects under development have taken FID, including the FID for the development of Petronas’s Kasawari CCS project off the coast of Sarawak, Malaysia, which is considered the world largest offshore CCS project, with capturing capacity around 3.3mn tonnes CO2 per year.Over 100 projects may be sanctioned in 2023, which would be considered a significant rise in the CCS portfolio.On a regional basis, the major share of capturing capacity for operational CCS in 2022 belongs to the US with more than 50%, followed by Canada and Asia Pacific.The CCS projects under development are distributed over 30 countries with some projects in different phases of progress.According to the IEA’s Carbon Capture, Utilisation and Storage 2022 report, the US has about 80 projects that are under development through to 2030, with total capturing capacity of 100Mtpa. This would increase the US capacity in CCS five times.Also in North America, Canada is working on enhancing its CCS deployment, with about 15 projects under development, the GECF said.

Africa accounts for 18% of the global population, but just 2.1% of air transport activities including cargo and passenger segments. Africa faces several challenges in its aviation industry..text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px;}@media only screen and (max-width: 767px) {.text-box {width: 30%;}}**media[15358]**Infrastructure constraints, high costs, lack of connectivity, regulatory impediments, slow adoption of global standards and skills shortages affect the customer experience and are all contributory factors to African airlines’ viability and sustainability. The continent’s carriers suffered cumulative losses of $3.5bn during the 2020-2022 period.Moreover, the International Air Transport Association estimates further losses of $213mn in 2023.Many African airports lack modern infrastructure, such as modern runways, taxiways, and navigation aids. This limits the ability of airlines to operate efficiently and safely.The regulatory environment for aviation in Africa is often complex, inconsistent, and subject to corruption. This can create significant barriers for airlines looking to operate in multiple African countries.African airlines often struggle to access funding for expansion and modernisation. This is due to factors such as limited access to capital markets, high operating costs, and limited government support.Safety and security concerns remain significant challenges facing African aviation. Many African airlines have poor safety records, and some countries in Africa have significant security challenges.African airlines also face stiff competition from foreign carriers. Many African airlines struggle to compete with larger and more established carriers from Europe, the Middle East, and Asia.Obviously, these challenges create a difficult environment for African airlines to operate in. Addressing these challenges will require significant investment in infrastructure, regulatory reform, and support for local carriers.Sustainably connecting the African continent internally and to global markets with air transport is critical for bringing people together and creating economic and social development opportunities, IATA says.It will also support the realisation of the UN’s Sustainable Development Goals (UN SDGs) for Africa of lifting 50mn people out of poverty by 2030.In particular, trade and tourism rely on aviation and have immense unrealised potential to create jobs, alleviate poverty, and generate prosperity across the continent.Africa has a solid foundation to support the case for improving aviation’s contribution to its development. Pre-Covid aviation supported 7.7mn jobs and $63bn in economic activity in Africa, IATA said and noted projections are for demand to triple over the next two decades.Undoubtedly, Africa continues the path to recovery from the Covid-19 crisis. Air cargo is 31.4% over 2019 levels and air travel is 93% of 2019 levels. Full recovery for air travel is expected in 2024.Recently, IATA launched ‘Focus Africa’ to strengthen aviation’s contribution to Africa’s economic and social development and improve connectivity, safety and reliability for passengers and shippers.This initiative will align private and public stakeholders to deliver measurable progress in some key areas such as safety, infrastructure, connectivity, finance and distribution, sustainability and future skills.“Africa stands out as the region with the greatest potential and opportunity for aviation. The Focus Africa initiative renews IATA’s commitment to supporting aviation on the continent. As the incoming chair of the IATA Board of Governors, and the first from Africa since 1993, I look forward to ensuring that this initiative gets off to a great start and delivers benefits that are measurable,” said Yvonne Makolo, also CEO of RwandAir.IATA director general Willie Walsh noted, “The limiting factors on Africa’s aviation sector are fixable. The potential for growth is clear. And the economic boost that a more successful African aviation sector will deliver has been witnessed in many economies already.“With Focus Africa, stakeholders are uniting to deliver on six critical focus areas that will make a positive difference. We will measure success and need to hold each other accountable for the results.”

Qatar's outlook for 2023-2024 is favourable, thanks to continued elevated global gas prices, Allianz Trade said and noted the country’s economy strengthened on the back of high global natural gas prices.In its latest country update, Allianz Trade forecasts around 3% growth for Qatar over the next two years. After a slow start, Qatar’s “recovery from the double shock of the global Covid-19 crisis and the drop in oil and gas prices in 2020 has been sound.”Real GDP contracted by -3.6% in 2020, less than the GCC average of -4.9%, thanks to a more diversified economy and lower dependence on oil revenues – Qatar’s main export product is natural and manufactured gas.A moderate recovery in 2021 resulted in real GDP growth of 1.6%. The recovery gained strong momentum in 2022, mainly thanks to the sharp rise in global gas prices, Allianz Trade noted.Moreover, a high Covid-19 vaccination rate allowed for the successive removal of lockdown measures and supported consumer spending.FIFA World Cup Qatar 2022 also supported economic growth through increased tourism revenues. Real GDP grew by an average 4.4% in the first three quarters of 2022 and Allianz Trade estimates it to have accelerated towards the end of the year.Qatar’s fiscal reserves are solid but an elevated public debt level requires monitoring, Allianz Trade noted. Qatar’s fiscal breakeven point has ranged between $35 and $55 per barrel of crude oil over the past decade.Hence the government has recorded large annual fiscal surpluses in most years, except for 2016-2017 when oil and gas prices had been persistently low for some time.“Even in 2020 a small surplus of 1.3% of GDP was achieved. The surplus widened to around 4.4% in 2021 and we estimate it to have increased to more than 10% in 2022, thanks to surging gas prices. We project continued robust surpluses close to 10% of GDP in 2023-2024,” Allianz Trade noted.Meanwhile, the country’s public debt rose from 25% of GDP in 2014 to 73% in 2020, in part due to declining nominal GDP. However, the debt-to-GDP ratio eventually declined to 58% in 2021 and Allianz Trade expects it to fall further over 2022-2024 in the wake of the economic recovery.Allianz Trade forecasts the ratio to remain elevated and it should be monitored closely. Overall, however, Qatar will remain a large net external creditor, thanks to the huge foreign-asset position in the Qatar Investment Authority (QIA, a sovereign wealth fund currently estimated at approximately $475bn).“External liquidity will remain unproblematic in the next two years. Qatar has recorded large, sometimes huge annual current account surpluses for more than two decades, with the exceptions of 2016 and 2020 when global oil and gas prices were particularly low,” Allianz Trade noted.These surpluses, it said, have contributed to the build-up of the QIA. Higher oil and gas prices moved the current account back into a surplus of nearly 15% of GDP in 2021 and more than 20% in 2022. That ratio is likely to narrow somewhat in 2023-2024 but should remain well in the double digits.External debt is relatively high; it rose to 126% of GDP in 2020, incurred by oil and gas investments since the 2000s, but repayment obligations are unlikely to present liquidity problems. Meanwhile, the ratio is estimated to have fallen to approximately 84% in 2022 and should decline further.The annual debt-service-to-export-earnings ratio is forecast at a manageable 16% or so in 2023. Qatar’s “financial resources will remain strong.”The combined FX reserves of Qatar Central Bank and the QIA represent over 200% of annual GDP and cover more than 80 months of imports, Allianz Trade noted.

New Opec cuts may tighten markets considerably and widen the oil market deficit in the second half of this year, Emirates NBD said Monday.The regional banking group forecasts Brent to average $92.50/barrel in H2, 2023.Some members of Opec+ have announced a “surprise” production cut to take effect from May and be held until the end of the year. Saudi Arabia will cut output by 500,000 barrels per day (bpd) while several other members will also cut output substantially.The UAE will cut by 144,000 bpd, Iraq by 211,000 bpd and Kuwait will cut output by 128,000 bpd.The production changes will mirror “voluntary” cuts of 500,000 bpd that Russia is making in response to sanctions that have been placed on its oil exports.“Including Russia’s cuts, the total reduction from Opec+ will be about 1.6mn bpd though as several members of Opec are already failing to hit their output targets, the scale of the cut is likely to be smaller,” Emirates NBD said in a report.“The move surprised markets and analyst consensus. Our own expectation was that Opec+ would keep production unchanged from the levels it set in October last year when it also implemented a supply cut,” Emirates NBD noted.As recently as February this year, Prince Abdulaziz bin Salman, Saudi Arabia’s energy minister, said that the “agreement that we struck in October is here to stay for the rest of the year,” referring to planned cuts of 2mn bpd announced in October last year.Since then, financial markets have endured considerable stress due to the collapse of several institutions in the US along with the descent of Credit Suisse.That strain in financial markets did spill over into oil prices — West Texas Intermediate (WTI) futures recently hit a bottom of $64/b on March 20 — though prices were already on their way higher with WTI ending last week at $75.67/b.The announced cuts from several Opec members will widen the oil market deficit in the second half of 2023, provided they are held for the full tenure of the agreement.“Our prior oil market balance assumptions had a deficit emerging in H2 this year as demand was set to recover strongly from Q2 onward as China’s oil demand normalised. With the new cuts from Opec+ taken into the baseline, the deficit will near on 3m b/d by Q4 this year and drain inventories down to 53 days of OECD demand. The pre-pandemic average for inventory days of demand had been about 62 days so the cuts will have a meaningful tightening effect on balances,” noted Edward Bell, senior director, Market Economics at Emirates NBD.The cuts from Opec+ ministers reinforce Emirates NBD’s view that oil prices will recover from recent lows, particularly in H2.“For now, we hold our recently revised oil forecasts unchanged — targeting Brent at an average of $92.50/b in H2 — though the cuts do provide some upside risks to that view,” he said.

ICT spending in Qatar is set to reach $5.6bn this year and $6.2bn by 2026, according to a latest forecast by International Data Corporation (IDC).In its regional forecasts for the year ahead, IDC revealed that it expects telecommunications services spending in Qatar to increase, with IT spending set to grow from $3.14bn this year to $3.6bn in 2026.This, IDC noted, aligns with Qatar’s national vision which aims to build a vibrant ICT sector as part of an advanced knowledge economy and a sustainable future for its people.“To navigate storms of disruption, organisations in Qatar will need to invest in strengthening their digital resiliency so they are better positioned to succeed in new market environments as conditions continue to change," says Jyoti Lalchandani, IDC's group vice president and regional managing director for the META region.”"Regardless of what the economy throws at us over the coming 12 months, the implementation of further digitalisation in critical areas such as customer experience, operations, and financial management together with a more rapid shift to a 'digital business' approach will be key to separating the thrivers from the survivors.“To this end, we expect to see digital transformation spending as a share of overall IT spending continue to grow, reaching $3.6bn in 2026, up from $3.14bn in 2023," he added.In a digital-first economy, where an enterprise's competitiveness is tied to its digital business model, leaders will avoid wholesale cutbacks in tech. Further, new tactics will be employed as tech leaders seek to realise maximum business value from their tech investments. In Qatar, spending on Enterprise IT will reach $1.87bn and consumer spending will reach $1.08bn in 2023.

The Qatari banking sector's total assets moved up 0.3% MoM (down 2.3% in 2023) in February to reach QR1.862tn, QNB Financial Services said in a report.The sector’s liquid assets to total assets was at 30.3% in February, compared to 30.2% in January this year.The total loan book edged up by 0.1% MoM (down 0.7% in 2023) and deposits declined by 1.0% MoM (-4.9% in 2023) in February.Deposits declined by 1.0% during February to QR950.2bn, mainly due to a 6.4% fall in non-resident deposits, QNBFS said.Loans edged up 0.1% during February to reach QR1,246.7bn, mainly due to gains both in the private (0.1%) and public (0.3%) sectors.Loans have declined by 0.7% in 2023, compared to a growth of 3.3% in 2022. Loans grew by an average 6.7% over the past five years (2018-2022), QNBFS said.The banking sector's loan provisions to gross loans was at 3.6% in February, similar to that of January this year.Both the private and public sectors pushed the overall credit higher. As deposits fell by 1% in February, the loans to deposits (LDR) rose to 131.2% compared to 129.6% in January.The overall loan book went up by 0.1% in February. Domestic private sector loans moved up by 0.1% MoM (+0.2% in 2023) in February 2023. The real estate segment was the main contributor towards the private sector loan gain.The real estate segment (contributes 23% to private sector loans) moved higher by 2.0% MoM (+1.7% in 2023), while general trade (contributes 21% to private sector loans) moved up by 0.1% MoM (+0.8% in 2023).However, consumption and others (contributes 20% to private sector loans) went down by 0.9% MoM (-0.6% in 2023), while services (contributes 29% to private sector loans) was lower by 0.2% MoM (-0.6% in 2023) in February.Total public sector loans increased by 0.3% MoM (-2.8% in 2023). The government institutions segment (represents 67% of public sector loans) loan book gained 0.4% MoM (+1.5% in 2023), while the government segment (represents 28% of public sector loans) added 0.3% MoM (-12.1% in 2023).However, the semi-government institutions segment declined by 1.2% MoM (-0.6% in 2023). Outside Qatar loans contracted by 0.8% MoM (-0.2% in 2023) in February, QNBFS said.Private sector deposits declined by 0.8% MoM (-1.1% in 2023) in February 2023. On the private sector front, the companies and institutions segment dropped by 2.8% MoM (-4.1% in 2023). However, the consumer segment increased by 1.1% MoM (+1.9% in 2023) during February 2023.Public sector deposits increased by 1.8% MoM (-7.7% in 2023) for the month of February 2023. The government institutions segment (represents 59% of public sector deposits) moved up 3.6% MoM (-2.6% in 2023), while the government segment (represents 27% of public sector deposits) went up by 3.4% MoM (-18.5% in 2023).However, the semi-government institutions’ segment fell by 7.2% MoM (-4.7% in 2023) in February 2023, QNBFS said.An analyst told Gulf Times yesterday that the “overall decline in the deposits by 1.0% in February 2023 is mainly due to the 6.4% drop in non-resident deposits. With higher energy prices and improved local liquidity situation, there is less reliance on non-resident deposits and optimisation in funding sources for banks”.

Strong business optimism has underpinned Qatar's 2023 growth outlook, Oxford Economics said in its latest country outlook.Oxford Economics has left its 2023 GDP forecast for Qatar unchanged at 2.7% and sees the economy sustaining this pace in 2024 as the government continues to support growth.The researcher 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 February PMI showed business activity growing for the first time since September 2022, led by demand in the wholesale and retail sectors.The monthly rise on January was the second strongest since the PMI data began to be compiled, driven by a rebound in output and new business. Although the employment index changed little during the month, businesses are upbeat about growth prospects, with expectations of activity soaring to a 41-month high.The February PMI points to a slowing albeit steady growth path in 2023, in line with regional trends.Although commodity prices have softened amid weaker global growth, they remain elevated, providing support to Qatar's macroeconomic environment. GDP data for Q4, 2022 is yet to be reported, but the researcher expects activity to have been supported by the month-long FIFA World Cup Qatar 2022, which brought an influx of visitors.“We continue to think GDP expanded by 4.1% last year. GDP data for Q3, 2022 show the economy grew by 4.3% year-on-year (y-o-y), marking a slight decline on a quarterly basis. The expansion was driven by 5.3% y-o-y growth in the non-oil sectors, amid strength in construction, transportation, and wholesale and retail trade. Meanwhile, the oil sector expansion stood at 2.7% y-o-y,” Oxford Economics said. “Firms are optimistic about near-term growth prospects, with the 12-month outlook soaring to a 41-month high. Weaker global growth and softer commodity prices are dampening exports and the budget revenue outlook.”Oxford Economics’ baseline sees spending growth easing, leading to a budget surplus of 10.3% of GDP this year.According to Oxford Economics, the government ran a surplus of QR89bn (10.7% of GDP) in 2022, the strongest outcome since 2014. Expectations of sustained fiscal surpluses have triggered a positive credit outlook change from Fitch.Prices rose by 0.2% month-on-month (m-o-m) in February, raising annual inflation to 4.4%, from 4.2% in January.The recreation and culture category, 11% of the CPI basket, drove the increase, with the sub-index rising 5.2% m-o-m, offsetting declines in other categories.“We expect annual inflation rates to be on a downtrend in the coming months and continue to forecast average inflation at 2.3% this year before stabilising around 2% in the medium term,” Oxford Economics noted.The Qatar Central Bank tracked the US Federal Reserve in hiking 25bps in March. More tightening is likely in the coming months, which will weigh on lending and non-oil growth, before rates are cut in 2024, the researcher noted.

The storm in markets at present cannot be seen as a challenge to commodity market fundamentals, yet, Emirates NBD noted commodities will ride out of financial market stress.The current squall in financial markets has hit oil markets hard. Brent futures have fallen $9/b since the end of February, roughly an 11% drop. Moves in the WTI price have been of a similar scale, dropping to less than $70/b by mid-March, their lowest levels since the end of 2021. But the tempest in oil prices is thanks to a shift in risk appetite, not a change to the fundamental picture for crude oil.The move in oil prices is headline-grabbing but if it meant a revaluation of supply and demand balances, and Emirates NBD would expect to see a commensurate move in other commodities, particularly in oil products. So far this has not been the case.Gasoline futures have actually risen since the end of February, up 3% while benchmark gasoil futures have fallen, but not to the same degree as oil prices, Emirates NBD said.In the metals markets, prices have hardly nudged. LME copper prices have slipped by barely 2% but that may be due more to the lacklustre (though still positive) industrial demand data for China in the first few months of its post-Covid emergence. Iron ore prices have managed to hold stable during the period of stress in financial markets.As might be expected, the one metal that has seen some sharper movement is gold as prices have received a boost as investors seek out havens and discount the path of more interest rate hikes from the Federal Reserve – spot gold prices rose near 10% from March 8 to March 17 as the SVB and Credit Suisse dramas played out.“The early phase of the Covid-19 pandemic in 2020 provides a much clearer picture of a complete revaluation of commodity fundamentals. As the global economy shuddered to a halt as lockdowns were imposed across many countries, commodity prices fell heavily and, critically, in unison,” Emirates NBD noted.Oil prices fell almost 50% in the same time frame (end of February to mid-March) while gasoline prices fell 70%, gasoil was down 35% and copper prices dropped by almost 20%.Gold similarly held up well. Conditions in the macroeconomy now versus 2020 are wholly different: growth in many countries is holding up relatively well given the scale of monetary tightening so far and consumers still seem to be spending, even with inflation at stubbornly high levels.Price action in the options markets for front month oil futures has shifted to pricing in more downside. The skew for WTI options has tilted much more to puts as the stress in financial markets sparks a scramble for downside protection.But the scale of the move is nowhere near the price reorientation that occurred during March 2020 when downside premiums surged as consumers and industry were put into lockdown and oil consumption collapsed, suddenly.“The collapse of a substantial bank and rescue purchase of another is to be certain a signal that pockets of the financial system are in poor health. But we do not view the storm in markets at present as a challenge to commodity market fundamentals, yet,” Emirates NBD added.

The expansion of Qatar’s gas capacity and the pipeline of planned projects are expected to draw in further foreign investment, Oxford Economics said in a report.“Our growth forecast is 2.7% for this year, and we expect the economic expansion to continue in 2024 as the government continues on supporting growth,” Oxford Economics said in its latest update.On Fitch upgrading Qatar's credit outlook to positive, Oxford Economics noted, “Expectations of sustained fiscal surpluses have triggered Fitch to reaffirm its AA- credit rating for Qatar and upgraded its outlook to positive. This positive outlook is led by the expectation of a strong external balance sheet, low debt-to-GDP ratio, and sustained fiscal surpluses.“This is in line with our view that Qatar will post a budget surplus of 10.3% of GDP in 2023, amid resilient LNG prices, and narrowing to 7.6% of GDP next year.”According to Oxford Economics, the gas sector is a Qatar “priority”. Recent LNG deals awarded for the North Field gas expansion project will have a positive medium-term impact, facilitating an increase in LNG capacity by almost 65% to 126mtpy by 2027, from 77mtpy.This includes multi-year supply agreements with China and Germany for LNG output set to be added in the first phase of the project due in 2026.Non-oil sector recovery will slow in 2023 after a strong 2022. The non-oil sector is likely to have expanded by 6% in 2022, marking the fastest pace since 2015.However, this is weaker than the 7.6% pace Oxford Economics projected previously, given historical data revisions.Recent data showed oil activities expanded by 6.5% in Q2, 2022, down from 9.7% previously.The pace will slow to 3.3% in 2023 as momentum eases with the conclusion of the World Cup. But this will still be stronger than the 2.7% expansion in 2021, which followed a decline of 4.7% in 2020, the researcher noted.Inflation dropped by1.8% m/m in January, following the end of the World Cup, leaving annual inflation at 4.2%, markedly slower than the 5.9% rise in December.Some of the key drivers behind the earlier rise in the headline, particularly recreation and culture prices, are now reversing. Although the decline is being offset by further rises in housing and transport prices, the drop in January inflation was larger than the researcher anticipated, prompting it to cut its 2023 CPI projection by 0.9ppts, to 2.3%.This is less than half the average pace of 5% in 2022, Oxford Economics said.

During the pandemic, there was an urgency about finding new ways to access goods and services and provide these to people around the world.For instance, in Ghana, drones delivered 13% of the country’s initial shipment of Covid-19 vaccine in a matter of few days!In the United States, the Alphabet-owned drone delivery company ‘Wing’ saw demand for its services double as people looked for contactless ways to get access to consumer goods.According to the World Economic Forum, drones have been touted as a technology that will feature prominently in the fourth industrial revolution. Apart from the military aspect of the technology, they are being used by recreationists and commercial businesses.Governments around the world have clearly demonstrated interest in helping this industry to expand its operations, which can access hitherto inaccessible places. Technology has made drones more accessible and affordable for consumers and businesses.No wonder, many countries are granting more approvals under current frameworks, and also adopting more comprehensive frameworks to enable larger scale drone operations.Drones, also known as unmanned aerial vehicles (UAVs), are aircraft that can fly without a pilot on board. They are controlled remotely or autonomously through a computer programme. Drones come in a variety of sizes and shapes, ranging from small handheld devices to large aircraft that can carry heavy payloads.These can be used for a wide range of purposes, including aerial photography and videography, surveying land and crops, monitoring wildlife, delivering packages, conducting search and rescue operations, and providing real-time data for disaster management. They are also used by the military for reconnaissance and surveillance purposes.They typically have multiple rotors and are powered by rechargeable batteries. Many drones are equipped with cameras and sensors that allow them to capture high-quality images and collect data.Due to the many different types of drones, applications, and markets involved, the total value of the global drone industry is difficult to be estimated precisely.However, a report noted the global drone market size was valued at $22.5bn in 2020 and is projected to reach $87.5bn by 2025, growing at a compound annual growth rate (CAGR) of 31.3% during the forecast period.This growth is driven by the increasing demand for drones in various applications such as military and defence, agriculture, infrastructure inspection, surveying and mapping, photography and videography, and delivery services.The increasing adoption of drones in commercial applications and the development of new technologies such as artificial intelligence, machine learning, and computer vision are also contributing to the growth of the industry.North America is currently the largest market for drones, followed by Europe and Asia Pacific. However, the Asia Pacific region is expected to grow the fastest during the forecast period, driven by the increasing demand for drones in China and India.The global drone industry is expected to continue to grow rapidly in the coming years, driven by technological advancements and the increasing adoption of drones in various industries and applications.That said, many countries including the US, UK, Australia, Canada and France have imposed restrictions on rogue drones to protect public safety and security.While drones offer many benefits, they also raise concerns about privacy, security, and safety. Governments around the world have introduced regulations to address these concerns and ensure that drones are used safely and responsibly.In the US, Federal Aviation Administration (FAA) regulates the use of drones and have imposed restrictions on them near airports, government buildings, and other sensitive locations. Drone pilots are required to register their drones and follow specific guidelines to operate them safely.In other countries, there are also restrictions on the size and weight of drones that can be flown without permission and the locations they can be operated. Some countries insist that drones must also be registered and marked with the owner's contact information.An industry research earlier revealed that UAVs can actually be much more damaging to aircraft than birds at the same impact speed, even if they are of similar weight.The study, published by the Alliance for System Safety of UAS through Research Excellence, a think-tank, used computer simulations to examine the impact of bird and UAV collisions in more than 180 scenarios.The researchers found that the drones’ rigid and dense materials — such as metal, plastic and lithium batteries — can put aeroplanes at much greater risk than a bird carcass.A researcher said that in every collision scenario (with a drone) there was at least minor damage to the plane and sometimes it was much more severe.In one case, the researchers discovered that if a drone were to hit an aircraft’s fan blades when it is operating at its highest speed, the blades could shatter and snap power to the engine.According to industry experts, the law that is generally accepted is that it is illegal to fly a drone within 1km of an airport or airfield boundary and flying above 400ft (120m), which increases the risk of a collision with a manned aircraft – is also banned.The vulnerability of most airports is all too apparent when it comes to rogue drones, and therefore only tougher laws can deter unprincipled operators of such unmanned aerial vehicles.Undoubtedly, drones flown by untrained, unlicensed personnel are a real and growing threat to civilian aircraft.Therefore, experts have called for drone regulations to be put in place before any serious accidents occur.Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

Qatar's public spending will rise modestly this year based on higher Brent forecast of $86 per barrel against the budgeted $65 per barrel, Oxford Economics has said in a report.Public spending will rise modestly this year, Oxford Economics said and noted the country’s 2023 budget, based on an oil price $65/b, upfrom assumed $55 in 2022 budget, projects a surplus of QR29bn, equivalent to 3.4% of GDP.“Our forecast for Brent is at $86pb in 2023, significantly above the budgeted price. On that basis, we anticipate a modest rise in spending, in contrast to the reduction pencilled in the budget.But we still expect a surplus of 9.7% of GDP next year,” Oxford Economics said.Crude production will rise modestly in 2023, it said. Qatar is not involved in the Opec+ agreement on production quotas, and output will likely rise further above 600,000 bpd this year.Production slid by 0.6% last year, undershooting researcher’s expectations of a modest rise.The gas sector is a priority. Recent LNG deals awarded for the North Field gas expansion project will have a positive medium-term impact, facilitating an increase in LNG capacity by almost 65% to 126mtpy by 2027, from 77mtpy.This includes multi-year supply agreements with China and Germany for LNG output set to be added in the first phase of the project due in 2026.Non-oil sector recovery will slow in 2023 after a strong 2022. The non-oil sector is likely to have expanded by 6% in 2022, marking the fastest pace since 2015.However, this is weaker than the 7.6% pace Oxford Economics had projected previously, given historical data revisions.Recent data showed oil activities expanded by 6.5% in Q2, 2022, down from 9.7% in the previous release.The pace will slow to 3.3% in 2023 as momentum eases with the conclusion of the FIFA World Cup Qatar 2022. But this will still be stronger than the 2.7% expansion in 2021, which followed a decline of 4.7% in 2020, the researcher noted.Inflation dropped by1.8% m/m in January, following the end of theWorld Cup, leaving annual inflation at 4.2%, markedly slower than the 5.9% rise in December.Some of the key drivers behind the earlier rise in the headline, particularly recreation and culture prices, are now reversing. Although the decline is being offset by further rises in housing andtransport prices, the drop in January inflation was larger than the researcher anticipated, prompting it to cut its 2023 CPI projection by 0.9ppts, to 2.3%.This is less than half the average pace of 5% in 2022, it said.

Qatar's nominal GDP is set to scale up to $227bn this year and nearly $229bn in 2024, Emirates NBD has said in a forecast.The country’s real GDP growth has been forecast at 2.7% this year and 3% in 2024.Qatar's current account as a percentage of GDP has been forecast at 29.8% in 2023 and 28.4% in 2024. Budget balance as a percentage of GDP has been forecast at 5.6% in 2023 and 6% in 2024.Consumer price inflation (CPI) has been forecast at 3% this year and 2.5% in 2024, Emirates NBD said.Developments in the banking sectors in the US and Europe have increased uncertainty about the outlook for rates, with markets now significantly more dovish than at the start of the year, and central banks holding the line with rate hikes in March. With inflation still well above target across developed markets, there are likely still more hikes to come, provided the financial sector stability issues are addressed and contained.The current squall in financial markets has hit oil markets hard, and although Emirates NBD believes the fundamentals remain constructive, the bank have revised our annual price forecast lower to $88 on Brent crude prices from $105 previously.This will have implications for GCC budgets, as oil remains a key contributor to government revenues in the region.“We now expect Saudi Arabia to run a largely balanced budget this year, and the UAE’s projected surplus will likely be smaller than last year’s 10.5% of GDP. However, the outlook for growth in the region remains unchanged for now, as we had not expected a meaningful increase in oil output this year coming into 2023,” Emirates NBD said.

Qatar delivered 12 more LNG cargoes in the first two months of 2023 compared to same period in 2022, according to Doha-based Gas Exporting Countries Forum (GECF).The number of LNG shipments in the first two months of 2023 reached 1,047, up 4% (or 41 more) than during the same period in 2022, GECF said in its latest monthly report.In February 2023, the LNG spot charter rate for steam turbine carriers averaged $34,600 per day, which was 36% lower month-on-month (m-o-m), but 111% higher year-on-year (y-o-y).Spot charter rates usually observe a seasonal increase at the end of the year, as demand for LNG grows for the upcoming winter. In 2022, the same factors were at play, coupled with further tightness in the market due to European buyers purchasing cargoes as floating storage, resulting in extremely elevated charter rates, GECF said.“As the winter season commenced, these floating cargoes began to be discharged, freeing up carriers and reducing spot charter rates. Additionally, the mild winter conditions helped to ease gas demand somewhat, contributing to fewer inter- basin flows, and thus charter rates softening even further, from January into February,” GECF noted.The average price of the leading shipping fuels in February 2023 was $610 per tonne, which was unchanged from the previous month, and 14% lower y-o-y.The impact of decreases in LNG spot charter rates and delivered spot LNG prices, resulted in a net decrease in the LNG shipping cost, by up to $0.53/MMBtu compared with the previous month, it said.When compared with the same month one year ago, in February 2023 charter rates were greater, but fuel prices and delivered spot LNG prices were lower than in 2022, resulting in LNG shipping costs up to $0.33/MMBtu lower.In February, 1.47 Mtpa of liquefaction capacity were impacted by planned an unplanned outages, which was down from 2.03 Mtpa of liquefaction capacity that were impacted in February, GECF noted.At a project level, the Freeport LNG facility in the US was impacted by the unplanned outage in February, while the Skikda LNG facility in Algeria was undergoing planned maintenance activities. Meanwhile, the force majeure on feedgas supply to the liquefaction facility in Nigeria, which was declared in January, remained in effect in February as well, GECF said.

Consider a flight that operates on less than 10% passenger capacity! In an industry that is hard pressed for funds, particularly after the Covid-19 pandemic decimated air travel, it is something very difficult to comprehend.But a recent report in the UK’s Guardian newspaper said that 5,000 “empty”, and 35,000 flights with less than 10% occupancy, had flown in the United Kingdom since 2019!Termed by some as “ghost flights”, they are generally considered to be aircraft that operate on less than 10% passenger capacity, according to the International Air Transport Association.The UK story had “significant flaws”, however, IATA noted.Firstly, this period covered the pandemic, which was completely unrepresentative of a normal air transport market.Secondly, no context was given around the numbers. 40,000 sounds a lot, but in the context of the 4,566,382 flights that took place in the United Kingdom over that period — even during the unprecedented Covid-19 collapse in traffic — that comprises less than 1% of all flights.Of course, any flight that takes place almost empty is bad for the environment and bad for airline finances. But precisely for these reasons, airlines don’t operate ghost flights without cause.The analysis in the Guardian failed to explain that many of these flights were cargo flights, carrying vital supplies, including vaccines and personal protective equipment, during the pandemic. The cargo demand and humanitarian need justified the operation of certain flights, even with low passenger load factors.Similarly, there were a number of repatriation flights, or flights where passenger numbers were deliberately restricted to comply with Covid regulations set by governments.Additionally, there are always some flights to move aircraft to maintenance facilities or, as was the case during the pandemic, fly a significant number into storage.Flights to protect slots?Were any of these flights simply slot blocking? The 80-20 ‘use-it-or-lose-it’ rule was obviously not designed to work during a 95% collapse in demand, and the slot rules were cited as a potential cause of some flights having to operate unnecessarily in Europe.But this was not the case in the United Kingdom, where the slot rules were suspended, IATA noted in a recent analysis.There was a risk that some unnecessary flights could happen in the EU because the European Commission was too quick to restore higher slot use rates. However, for the most part during the pandemic, the slot rules were just about flexible enough that ghost flights were not a major issue.IATA Director General Willie Walsh said: “I’m not aware of any airline company that I have worked with deliberately operating an empty flight simply to maintain a slot.”The ghost flights non-story has, however, raised important questions that need to be answered on slot allocation rules. The European Union is looking again at its Slot Regulation, with a consultation in place leading to a potential revision of the rules in 2023.Although the revision is focusing on wider issues of competition, accessibility, and capacity, the role of slot rules in promoting greener flying is also in the mix. In addition to international efforts to reach net-zero carbon emissions, the European Union has instigated its own initiatives through the EU Green Deal.Some politicians erroneously believe the slot system is creating ghost flights or that the slot process should be used as part of the Green Deal to prioritise the use of quieter or more fuel-efficient aircraft.Aviation is committed to exploring a multitude of options for reaching net-zero CO2, but airlines are united in their view that slot allocation decisions linked to the environment will not help the industry achieve its global sustainability objectives.“The pandemic was an exceptional period and extrapolating lessons or making policy changes based on the industry’s activities during this time would be a huge category error,” says Lara Maughan, IATA’s head (Worldwide Airport Slots). “Fiddling with the slot process to try to promote greener flying sounds positive in theory, but in practice it would make the slot process even more complicated while having minimal environmental gain. Trying to micro-manage slots may even have a detrimental environmental impact.”Part of the reason for this is the globally co-ordinated nature of the slot system. Airlines operating between two slot-coordinated airports must be able to work to a harmonised system of rules to best match demand with their planned schedule.If one country’s rules insist on operating the slot with a certain aircraft (for example for environmental reasons), then the airline may have to prioritise a non-optimal plane for that route, regardless of volume of demand—for example a narrowbody plane over a widebody.This, IATA said will affect consumer access and choice, and potentially impact another route that would have benefited from that aircraft choice.Any attempt to micro-manage the process at a handful of global, slot-constrained airports will only displace aircraft elsewhere, making no overall improvement to emissions and negatively affecting the benefits of aviation connectivity for travellers and the economy.Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn