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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

The density of physicians (including dentists) and nurses in Qatar “stands among the highest” in the GCC while also surpassing developed nations such as Singapore, Alpen Capital said in a report.Qatar had more than 3.4 physicians and approximately 8.1 nurses per 1,000 people as of 2019, Alpena Capital noted.The public sector accounted for 63.8% of the physicians and 74.2% of the nurses’ population in 2019.As of 2020, Qatar had 20 hospitals with the public sector accounting for 70% of the infrastructure. The total number of hospital beds in the country stood at over 3,134 beds in 2019, recording a CAGR of 4.5% since 2016.The public sector hospitals also held a higher bed capacity, accounting for 88.2% as of 2019.Bed density has improved from 1.0 beds per 1,000 people in 2016 to 1.1 beds per 1,000 people in 2019.Healthcare continues to be a priority for Qatar and the government has been constantly upgrading the quality of its healthcare infrastructure and services through reform initiatives, Alpen Capital said in its report on ‘GCC healthcare industry’.The country’s National Health Strategy (2018-2022) within its Vision 2030 Plan identified some 12 areas of focus including development of integrated health systems, and coverage of preventive and curative healthcare among others to deliver improved health outcomes.As part of its Healthcare Facilities Master Plan, the report noted the government aims to deliver some 48 new facilities such as primary healthcare centres, diagnostic and treatment centres, while also focusing on hospital expansions and building general and specialised hospitals.Despite the slowdown in economy, Qatar’s government increased its budget towards healthcare in 2021 and 2022 accounting for 8.5% and 9.8% of the total, respectively, to expand its infrastructureand increase focus towards quality services.The country’s growing population base, high disposable income, rising life expectancy, low infant mortality, and increasing prevalence of lifestyle-related diseases have led to an increase in the demand for healthcare services.Qatar’s current healthcare expenditure (CHE) grew at a CAGR of 2.0% between 2016 and 2020 to reach $6bn.Growth was largely supported by a 6.9% annualised increase in spending by the private sector while government spending has remained relatively flat (0.8% CAGR) over the four-year period.Of the total healthcare spend in 2020, 79.1% ($4.8bn) wasfinanced by the government. Amid rising participation from private sector, the share of government expenditure in Qatar has fallen from 82.7% in 2016 to 79.1% in 2020.Although the country’s CHE as a proportion of GDP has increased to 4.2% in 2020 from 3.7% in 2016, it remains amongst the lowest in the GCC.Being one of the wealthiest nations globally, Qatar recorded the highest per capita healthcare spending at $2,250.8 in 2020 in the GCC, Alpen Capital noted.According to Alpen Capital, CHE in the GCC is estimated to have grown at a CAGR of 9.5% between 2020 and 2022 to reach $104.1bn.The two-year period, when the healthcare sector was primarily combating the pandemic, recorded a high growth in inpatient and outpatient levels. Healthcare expenditure in the GCC is further projected to reach $135.5bn in 2027, growing at a CAGR of 5.4% from 2022.

Rate cuts are not expected in Qatar before 2024, Oxford Economics said and noted that with inflationary pressures easing, country’s monetary authorities will be hesitant to tighten policy further.The Qatar Central Bank opted to keep interest rates on hold in February, skipping the hike delivered by the US Federal Reserve for the first time this cycle, Oxford Economics said in its latest country report.The bank has previously matched the Fed's moves since March 2022, most recently raising the repo rate by 50bps to 5.25% in December.While the hikes have had a limited impact on growth so far, due to supportive energy and fiscal trends, the rise in borrowing costs will challenge non-oil growth in 2023.Qatari banks, Oxford Economics noted, have been resilient and are well capitalised and profitable, with low levels of non-performing loans.However, their reliance on foreign funding has risen, and Fitch downgraded some bank ratings earlier this year.Inflation registered a monthly drop of 1.8%, the biggest in the current series, dragging annual inflation down to 4.2% in January from 5.9% in December last year.Prices declined across most categories, with the cost of recreational and cultural services plunging by almost 13% month-on-month.Although a rise in housing and transport prices limited the overall decline, prices have eased substantially.Consequently, Oxford Economics cut its 2023 CPI projection by 0.9ppts, to 2.3%. Due to higher prices in main export commodities, Qatar enjoyed one of the largest terms-of trade improvements in 2022.Recent data show the trade surplus widened to QR355.2bn ($97.6bn) last year.As oil and gas prices remain above levels from early 2022, the external position will only deteriorate marginally this year, with the current account surplus at 15.6% of GDP, down from 17.1% in 2022.Oxford Economics’ 2023 GDP growth forecast for Qatar is still unchanged at 2.7%, only slightly higher than the consensus, at 2.6%.“We expect the non-oil sector to lead the expansion, though the pace of activity will nearly halve, to 3.3%. The January PMI fell to 45.7, the lowest in over two and a half years, as business activity has cooled since the World Cup.Still, the 12-month outlook soared to a three-year high, led by services sector resilience and labour market strength,” the researcher noted.In terms of tourist arrivals into the country, Oxford Economics’ baseline assumes only a modest drop in travel service exports this year given several major events, including the Asian Football Cup and the Formula 1 Qatar Grand Prix.Citing official figures, the researcher said there were over 600,000 tourist arrivals in December, the strongest monthly outcome in the series.The influx takes the 2022 total to 2.56m, more than four times the 2021 figure.

GECF LNG exports have jumped 12% (1.74mn tonnes) year-on-year (y-o-y) to 16.45mn tonnes in February, driven by Qatar, which is the forum's top liquefied natural gas exporter, Doha-headquartered Gas Exporting Countries Forum said in its latest monthly report.The surge in GECF’s LNG exports was driven by Qatar (+0.84mn tonnes), Norway (+0.36mn tonnes), Malaysia (+0.33mn tonnes), Egypt (+0.15mn tonnes), Mozambique (+0.15mn tonnes), Angola (+0.14mn tonnes), Algeria (+0.10mn tonnes), Trinidad and Tobago (+0.08mn tonnes), Russia (+0.05mn tonnes) and Peru (+0.02mn tonnes).In contrast, LNG exports declined in the United Arab Emirates (-0.26mn tonnes) and Nigeria (-0.21mn tonnes), GECF noted.Looking at Qatar and Angola, lower maintenance activity at LNG facilities in both countries compared to a year earlier boosted the countries’ exports.In Norway, the continued ramp-up in production from the Hammerfest LNG facility, following its restart in June 2022, drove the increase in exports.Furthermore, higher feedgas availability for LNG exports in Malaysia, Egypt, Algeria and Trinidad and Tobago supported the increase in exports from these countries.With regard to Mozambique, the ramp-up in production from the Coral South FLNG facility supported the rise in LNG exports.On the other hand, the decline in LNG exports from the UAE was attributed to maintenance activity at the Das Island LNG facility.In Nigeria, lower feedgas availability for LNG exports contributed to the lower LNG exports.NLNG declared force majeure on feedgas supply to the liquefaction facility in January 2023, which remained in effect in February, GECF noted.In February 2023, global LNG exports rose sharply y-o-y by 11% (3.48mn tonnes) to 34.00mn tonnes.Stronger LNG exports from GECF member countries, non-GECF countries and higher LNG reloads drove the growth in global LNG exports.Non-GECF countries were the largest LNG exporters during the month with a share of 49.5% in global LNG exports, followed by GECF (48.4%) and LNG reloads (2.1%).In comparison to February 2022, the shares of GECF member countries and LNG reloads increased from 48.2% and 0.8% respectively while the share of non-GECF countries declined from 51.0%, the monthly report showed.At a country level, the US was the largest exporter in February 2023, followed by Australia and Qatar.For January and February of this year, combined, global LNG exports rose by 6.7% (4.33mn tonnes) y-o-y to 69.44mn tonnes, GECF noted.

Import tariffs removal on top 10 exported GCC chemical products could earn the region $747mn based on 2021 trade figures, the Gulf Petrochemical and Chemicals Association has said in a report.This underlines the importance of Free Trade Agreements (FTAs) as a hugely beneficial instrument to increase the competitiveness of the GCC chemical industry and drive higher socio-economic benefits for the region, it said.The chemical industry is the third largest source of emissions in the industrial sector and contributes 14% of total industrial CO2 emissions, according to a white paper developed by GPCA and dss+ due to be released shortly.The paper also highlights that the industry is central to the achievement of net-zero ambitions, as its products contribute to emissions reduction in other industries. True net-zero transformation cannot be achieved in isolation without the involvement of external stakeholders such as policy makers, suppliers, customers and financial institutes, the paper argues.Senior industry leaders from the six GCC states convened at the third edition of the GPCA Leaders Forum to discuss the industry’s priorities in 2023 and beyond.The event concluded in Muscat under the theme, ‘Bracing for change: GCC chemicals in 2023 & beyond’ with 78 leaders from nine countries in attendance.“The petrochemical and chemical industries have an important role to play in supporting the circular economy. This means developing products that are recyclable, reducing waste and emissions, and exploring new ways to use waste streams as raw materials,” noted Hilal Kharusi, chief executive, Commercial & Downstream, OQ at Oman.Opening the forum, Kharusi highlighted the importance of carbon neutrality. “We must embrace the energy transition and look for ways to make our operations more sustainable. This means exploring new technologies, such as carbon capture and utilisation, investing in renewable energy sources, and innovation,” he said.Delegates enjoyed an array of insightful presentations from senior industry experts on pertinent topics, including the looming macro-economic outlook for 2023 and its expected impact on the chemical industry, delivered by Rachid Majiti, senior partner, McKinsey, as well as two leadership dialogues on international trade and the transition to net-zero.

Global aviation is facing significant challenges as time is fast running out for airlines to meet proposed regulatory deadlines in the United States to ensure they won’t suffer interference from 5G C-band transmissions from towers located near US airports and approach paths.Recently, the Federal Aviation Administration (FAA) in the United States issued a directive, which gives airlines until July 1 to install new aircraft radar altimeters (RadAlts) or upgrade existing ones with new filters to utilise instrument landing systems at affected US airports.Furthermore, from February 1, 2024, aircraft that have not been retrofitted with filters or new RadAlts will be banned from operating in US airspace.RadAlts not only tell an aircraft its height from the ground but also feed into other safety-critical systems that are vital for landing, particularly in poor weather.An eleventh-hour compromise between the FAA and 5G telecom providers avoided massive flight disruptions in 2022. Under the deal, the telecom providers — AT&T and Verizon — agreed to restrict power levels of their 5G C-band towers near airports and approach paths.That compromise is set to expire in July, however. In the same month, up to 19 additional telecom providers are expected to introduce 5G services in the C-band and they are not part of the existing, voluntary deal.Airlines have long warned that the fifth-generation wireless technology, widely known as 5G, could interfere with sensitive airplane instruments such as altimeters, significantly hampering low-visibility operations and grounding planes.FAA, airlines, and manufacturers have cautioned against 5G interference risks since 2018, when the US Federal Communications Commission (FCC) proposed auctioning off the bandwidth to telecom providers.The industry continued to raise these concerns during and following the auctions, which raised billions of dollars for the US government.Unfortunately, industry concerns went unheeded until late 2022, when they reached the White House, leading to the last-minute compromise.Since then, airlines have borne the cost of modifying thousands of aircraft to enable them to operate in CAT 2 and CAT 3 landing conditions in the presence of 5G transmissions.The FAA, meanwhile, has logged about 100 instances of possible interference with RadAlts, although none has resulted in an incident or accident.The FAA estimates the cost of compliance at $26mn based on $26,000 per retrofit for approximately 1,000 aircraft.IATA calculations put the cost at twice that amount and if the 6,000 US aircraft that have already been retrofitted to follow FAA recommendations are included, the price soars to more than $450mn.If the cost of non-US carriers is also added, the industry outgoing will be close to $640mn, the association points out.“The unfairness of this outcome cannot be overstated,” says Doug Lavin, IATA’s vice president, (Member and External Relations – North America).“Airlines are having to find and pay for a solution to a problem of somebody else’s making. They are blameless yet suffering the consequences. But we want to move forward. We are working hard to find a rational solution.”IATA Director General Willie Walsh in a recent letter to US Secretary of Transportation Pete Buttigieg and Acting FAA Administrator Bill Nolen noted, “It is now clear to everyone (the FAA, the aircraft manufactures, the radio altimeter manufacturers, and airlines serving the United States) that many operators will not make the proposed July 2023 ... retrofit deadline owing to supply chain issues, certification delays, and unavoidable logistical challenges.”To date, other than the US, only Laos remains as being of high concern, IATA noted.Laos is at the early stages of 5G development and there is every reason to believe that it will listen to IATA advice on keeping 5G away from the aviation spectrum, according to Stuart Fox, IATA’s director, Flight and Technical Operations.“There is a minor issue in India with carriers unnecessarily advised to contact RadAlt manufacturers about upgrading but there are no safety issues,” he says.At present, Canada has limited 5G C-band transmission power, introduced exclusion zones on an interim basis, and antennas have a national down-tilt requirement. Australia, China, and Japan have all taken sensible precautions.In Japan, for example, the macro cell power levels are only 4% of that permitted in the United States and the small cell power levels are less than 1%.In Europe, the dedicated 5G spectrum is in the 3.4GHz to 3.8GHz range, far enough away from that used by radio altimeters.The power levels are generally far lower too. French transmission power, for example, is ten times lower than that licensed in the United States.Walsh urged the FAA to develop a project plan that includes milestones agreed to by all involved in the retrofit implementation.“A well-crafted implementation project plan clearly offers greater opportunities for success than today’s decentralised approach. It will also give the telcos a realistic picture as to progress to date and an expectation as to when they can take full advantage of their 5G investment.“Finally, it will inform the US Government as a whole as to what steps may need to be taken if the current deadlines prove unachievable.”Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

Dukhan Bank reported a 5% year-on-year (y-o-y) growth in net profit to reach QR1.25bn in 2022, with an EPS of QR0.227 per share, post considering nominal value of QR1 per share.This comes after the bank’s transformation into a Qatari public shareholding company by listing its shares on the Qatar Stock Exchange and commencement of trading from February 21, 2023.Total income for the year increased to QR4.5bn, showing solid double-digit growth of 10% from last year, while net income from financing activities also grew to QR3.2bn, marking a 10% y-o-y growth. Overhead expenses were below last year by 4% from QR782mn to QR750mn.Total assets reached QR106bn and financing assets increased to QR76bn with a growth of 1% over last year. The balance sheet is mainly funded by customer deposits, which reached QR75bn. The regulatory LDR was maintained at 100% level, asserting prudent liquidity management by the bank.The bank’s total equity soared to QR12.5bn, representing a growth of 3%, whereas the total capital adequacy ratio was 18.3% as of December 31, 2022, in accordance with Basel III and Qatar Central Bank (QCB) guidelines, showing strong and well-capitalised position of the bank.Return on equity and assets were 11% and 1.2%, respectively in 2022. The bank has been rated “A2” and “A-” by Moody’s and Fitch, respectively with a stable outlook.Reflecting on the robust performance, Dukhan Bank’s board of directors proposed a dividend distribution to shareholders of 16% or QR0.16 per share, post considering nominal value of QR1 per share after its conversion to a public listed company, increased from QR0.14 per share or 14% of the nominal share value last year, subject to approval of general assembly meeting of the shareholders and QCBSheikh Mohamed bin Hamad bin Jassim al-Thani, chairman & managing director of Dukhan Bank, said: “We are very pleased that Dukhan Bank has continued its progressive growth journey, which led to improved financial performance that resulted in achieving solid growth, supported by stability, resilience, and high-performance of the Qatari banking sector in 2022.“The outstanding performance is also attributed to the exceptional hosting of the 2022 FIFA World Cup by the State of Qatar and the contribution that we have made to ensure its success by supporting our customers and Qatar’s guests with innovative and secured banking services.”He added: “This financial report is of particular importance to the bank’s management and shareholders as Dukhan Bank recently recorded a significant milestone by successfully listing its shares on the Qatar Stock Exchange, transforming into a Qatari public shareholding company. This step will enable us to share the positive results of the Bank’s successful growth journey over the years with a broader base of investors.”Noting the financial results, the board of directors stated: “The importance of the environmental, social, and corporate governance (ESG) strategy launched by the bank in 2022 was highlighted in the meeting. The bank aims to be placed in a leading position within Qatar’s transition to a sustainable society, helping to build a future in which economic growth and sustainability are aligned in accordance with Qatar National Vision 2030 with an increased focus on the bank digital transformation strategy to provide its more than 150,000 customers base an easy, secure, and seamless banking experience.”

QIIB’s strategy to diversify the bank’s investment and financing portfolios reinforced its position as a leading bank that maintains stable growth and achieves best returns for shareholders and best services and benefits for customers, chairman Sheikh Dr Khalid bin Thani bin Abdullah al-Thani has said.Addressing QIIB’s annual general meeting yesterday, Sheikh Dr Khalid noted that the bank “seized best opportunities to achieve potential gains.”He noted, “We continued to work hard with the Executive Management to accomplish our goals and worked closely with various economic sectors in Qatar in line with our strategy to diversify our investment and financing portfolios as much as possible to distribute potential risks.”Last year, he said Qatar continued to advance on all aspects and made great leaps in achieving self-sufficiency in most production and service sectors. After its successful hosting of the FIFA World Cup Qatar 2022, the country became a “role model and a pride” for Arabs and the Middle East.“At Qatar International Islamic Bank, we are proud of these achievements and we thrive to keep pace with the country’s developments.”Throughout 2022, QIIB managed to maintain the strength of its financial position and stability of growth, and established partnerships of various investment dimensions overseas based on its “distinguished reputation” of the Qatari economy.“The bank’s financial results for the fiscal year that ended on December 31, 2022 showed that we have been able to balance between maintaining the stability of our financial indicators and profitability and overcoming the negative factors in the markets in recent years,” Sheikh Dr Khalid said.Chief Executive Officer Dr Abdulbasit Ahmed al-Shaibei said, “QIIB results during the past year continued to progress, which is a reflection of the trust gained from the local market and its position within the Qatari banking sector, which is making great strides.“We have transformed the plans and strategies approved by the Board of Directors into reality. This can be seen across the balance sheet, which we have disclosed. We have succeeded in overcoming many challenges by promoting innovation and adopting methodical solutions that help us strengthen our financial position.”Dr al-Shaibei noted, “Last year witnessed a great transition in digital transformation, which paved the way for more services through QIIB’s digital channels. This contributed significantly in enhancing operational efficiency and increasing demand for our services in addition to achieving increased customer satisfaction and fulfilling their needs in accordance with the best internationally approved practices.”QIIB achieved a net profit of QR1.07bn in 2022, up 7.2% on the previous year.Total assets stood at QR56.4bn while net financing assets totalled QR35bn last year. Customer deposits totalled QR36.7bn and total equity increased to QR 9.1bn at the end of 2022.Meanwhile, the AGM approved the Board of Director's recommendations to distribute 40% of the bank capital as cash dividends, equivalent to QR0.40 per share.It approved the BOD recommendation to issue sukuk qualified as Tier 2 capital of up to $500mn after obtaining the necessary approvals from the supervisory authorities provided the conditions and size of the issuance will be subject to a study of the bank’s needs and market conditions.The AGM approved board of directors’ recommendation to extend last year General Assembly’s approval of $1bn (for a sukuk) based on a study for each issuance and bank needs after getting all necessary approvals from supervisory authorities. The sukuk should not exceed the bank’s capital and reserves.It approved board of directors’ recommendation to extend last year General Assembly approval to issue Additional Tier1 Sukuk nonconvertible with the same rules and regulations.Issued sukuk should not exceed 50% of the bank’s capital based on rules set by regulatory authorities in this regard.QIIB said the extraordinary general meeting scheduled yesterday could not take place due to a lack of quorum. It has been rescheduled (virtual) for March 20 at 5-30pm.

After being confined indoors for nearly two years, many travellers around the world are now booking more trips than they did before the coronavirus era, to make up for lost time and reconnect with friends and family.Obviously, travel is in greater demand these days even though ticket prices are skyrocketing.Many airports have become chaotic because airlines are struggling to meet travel demands. Most countries have already reopened their borders and eased their Covid-19 restrictions.As more and more welcome discerning tourists, a trendy new phrase has also emerged on social media – ‘revenge travel’.“Revenge” generally has a negative connotation, but “revenge travel” can be interpreted as getting revenge against the pandemic, or against Covid itself.It’s a way to show that travellers have gone past severe Covid restrictions and are finding joy through travel again. Probably, it’s a way to get revenge on the last two years.“While the term may sound silly, ‘revenge travel’ refers to the idea that there will be a huge increase in travel as it becomes safer and things open back up,” points out Eric Jones, co-founder of The Vacationer.Erika Richter, vice-president, American Society of Travel Advisors (ASTA) told CNN, “Revenge travel is a media buzzword that originated in 2021 when the world began to reopen, and people decided to make up for lost time.”Industry analysts believe “revenge travel will be all the rage over the next few years” and they estimate “a surge in bookings” in the coming months and years.In an attempt to gain back lost time that was taken during the pandemic, many people have begun booking trips, flights, and bucket-list destinations as many countries began reopening and allowing international tourists.The global body of airlines - International Air Transport Association (IATA) revealed that recovery in air travel was witnessed in 2022, which it said would continue this year.Total traffic in 2022 (measured in revenue passenger kilometres or RPKs) rose 64.4% compared to 2021. Globally, full year 2022 traffic was at 68.5% of pre-pandemic (2019) levels. December 2022 total traffic rose 39.7% compared to December 2021 and reached 76.9% of the December 2019 level.International traffic in 2022 climbed 152.7% versus 2021 and reached 62.2% of 2019 levels. December 2022 international traffic climbed 80.2% over December 2021, reaching 75.1% of the level in December 2019.Domestic traffic for 2022 rose 10.9% compared to the prior year. 2022 domestic traffic was at 79.6% of the full year 2019 level. December 2022 domestic traffic was up 2.6% over the year earlier period and was at 79.9% of December 2019 traffic.IATA’s Director General Willie Walsh said, “The industry left 2022 in far stronger shape than it entered, as most governments lifted Covid-19 travel restrictions during the year and people took advantage of the restoration of their freedom to travel. This momentum is expected to continue in 2023, despite some governments’ over-reactions to China’s re-opening.”According to CNN, “One thing is clear: as vaccines roll out and doors reopen, people around the world are eager to get back out on the road again.”Travel booking company Expedia tracks online search data related to travel and tourism. In 2021, the single highest increase in average travel search traffic – 10% – was in May, the week after the European Union voted to extend their contract with Pfizer and approve the vaccine for use on adolescents.A survey last year by Expedia found that 60% of consumers had plans to travel domestically and 27% to travel internationally.And many of these travellers are willing to spend more money on a vacation than they would have in the past.During the pandemic, people around the world underwent a type of 'lockdown fatigue’.And for well over two years, many people had either cancelled travel plans or put them on hold, hoping the postponement would be temporary. Unfortunately, for many, it was not.Thus, the rise of revenge travel!Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

IATA’s 2022 Safety Report for global aviation showed a reduction in the number of fatal accidents and the fatality risk, compared to 2021 and the five year average between 2018 and 2022.From this year, the safety report has been re-invented as an online interactive resource rather than in static PDF format.Report highlights include:• In 2022, there were five fatal accidents involving loss of life to passengers and crew. This is reduced from seven in 2021 and an improvement on the five year average (2018-2022) which was also seven.• The fatal accident rate improved to 0.16 per million sectors for 2022, from 0.27 per million sectors in 2021, and also was ahead of the five year fatal accident rate of 0.20.• The all accident rate was 1.21 per million sectors, a reduction compared to the rate of 1.26 accidents for the five years 2018-2022, but an increase compared to 1.13 accidents per million sectors in 2021.• The fatality risk declined to 0.11 from 0.23 in 2021 and 0.13 for the five years, 2018-2022.• IATA member airlines experienced one fatal accident in 2022, with 19 fatalities.IATA’s Director General Willie Walsh said, “Accidents are rare in aviation. There were five fatal accidents among 32.2mn flights in 2022. That tells us that flying is among the safest activities in which a person can engage. But even though the risk of flying is exceptionally low, it is not risk-free.“Careful analysis of the trends that are emerging even at these very high levels of safety is what will make flying even safer. This year’s report, for example, tells us that we need to make some special efforts on turboprop operations in Africa and Latin America. Safety is aviation’s highest priority, and our goal is to have every flight take off and land safely regardless of region or aircraft type.”The industry 2022 fatality risk of 0.11 means that on average, a person would need to take a flight every day for 25,214 years to experience a 100% fatal accident. This is an improvement over the five-year fatality rate (average of 22,116 years).Despite the reduction in the number of fatal accidents, the number of fatalities rose from 121 in 2021 to 158 in 2022. The majority of fatalities in 2022 occurred in a single aircraft accident in China that claimed the lives of 132 persons.The airline involved was not an IATA member but is on the IATA Operational Safety Audit (IOSA) registry (see Notes for Editors). The next largest loss of life occurred in an accident to an IATA member in Tanzania that resulted in 19 fatalities (see Notes for Editors). Participation in IOSA is a requirement for IATA membership.“IOSA continues to be the global standard for operational safety audits. With carriers on the IOSA registry having an aggregate safety record that is four times better than non-IOSA carriers, it is clearly continuing to make a difference. Now celebrating its 20th anniversary, we are transitioning IOSA to a risk-based model. By focusing on pertinent safety risks while maintaining a baseline of safety, IOSA will contribute to raising the safety bar even higher. Additionally, the IATA Standard Safety Assessment (ISSA), for operators of smaller aircraft that are not eligible for the IOSA programme, ensures we look to deliver continuous improvement in safety performance across the whole aviation ecosystem,” Walsh noted.The global average jet hull loss rate rose slightly in 2022 compared to the five-year average (2018-2022). Five regions saw improvements, or no deterioration, compared to the five-year average.The number of turboprop accidents declined in 2022 compared to 2021 but they accounted for four of the five fatal accidents last year with loss of life to passengers and crew onboard. Although sectors flown by turboprops represented just 10.6% of the total, turboprops were involved in 36% of all accidents, 80% of fatal accidents and 16% of fatalities in 2022.Six regions showed improvement or no deterioration, in the turboprop hull loss rate in 2022 when compared to the five-year average. The two regions to see increases compared to the five-year average were Latin America/Caribbean and sub-Saharan Africa.“Both sub-Saharan Africa and Latin America saw increases in turboprop accidents last year. Introduction and adherence to global standards (including IOSA) are key to reversing this trend. The priority for Africa continues to be implementation of the International Civil Aviation Organisation’s (ICAO) safety-related standards and recommended practices (SARPS),” said Walsh.

Moody’s expects takaful providers in the GCC region to pursue more merger and acquisition (M&A) deals after profit probably fell last year amid rising claims and costs.In a report, Moody’s Investor Service said it expects Islamic insurance (takaful) providers in GCC to accelerate technology investment and seek more merger and acquisition (M&A) deals to build the critical mass needed to improve efficiency and comply with more demanding regulation.“The sector’s growth prospects are favourable, reflecting the GCC region’s buoyant economy,” Moody’s noted.“Moody’s expects takaful providers in Gulf Co-operation Council countries to accelerate technology investment and seek more merger and acquisition (M&A) deals. This follows a likely decline in their combined net income for 2022 as higher prices only partly offset rising claims and costs.’’, said Mohammed Ali Londe, vice-president and senior analyst at Moody’s Investors Service."The sector’s growth prospects are favourable, reflecting the region’s buoyant economy. Increased demand for health and life insurance, the spread of compulsory insurance coverage, and still low insurance penetration indicate ample scope for expansion, though intense competition will constrain future price increases. Many small takaful players will pursue M&A deals to build the critical mass needed to improve efficiency and comply with more demanding regulations,” Londe noted.Increased demand for health and life insurance, the spread of compulsory coverage, and still low insurance penetration indicate ample scope for expansion, though intense competition will constrain price increases.Continued economic expansion, led by government efforts to diversify away from hydrocarbons, will create growth opportunities for the GCC insurance and takaful sector.The GCC region’s post-pandemic economic rebound, fuelled by rising oil prices and government investment in economic diversification, will drive faster premium growth.Rising prices were a supportive factor in the second half of 2022, particularly in retail lines, where there was steep discounting during the pandemic.However, Moody’s expects intense competition to constrain future price increases. Increased demand for health and life insurance, the spread of compulsory insurance coverage, and still low insurance penetration indicate ample scope for future growth.In 2022, inflationary claims increases and a return to normal claims volumes after a pandemic-related decline put GCC insurers' profitability under pressure.Other headwinds include the adverse impact of volatile financial markets on investment performance, amplified by insurers' high exposure to equities and real estate. Tighter regulations around governance, risk and capital management have added to compliance risks and costs, particularly for smaller insurers.“We expect many small takaful players to seek M&A opportunities to help them meet capital and other regulatory requirements, and to spread the cost of their digitalisation investments.“We expect GCC takaful operators to raise their prices in response to rising claims, broader insured coverage in medical and higher reinsurance costs, although the increase will be limited by intense competition,” Moody’s noted.The impact of environmental, social and governance (ESG) considerations on the credit strength of most insurers in GCC countries is neutral to low, with good risk management and governance helping to offset their moderately negative exposure to environmental and social risks, it said.