Qatar growth accelerates backed by strong construction growth in Q1
Posted on 9th July 2014
Qatar’s economy accelerated in the first quarter of 2014, driven by strong growth in construction, financial services and trade, restaurants and hotels, according to figures released last week by the Ministry of Development Planning and Statistics (MDPS). Qatar real GDP growth accelerated to 6.2 percent in the year to Q1 2014 with the non-hydrocarbon sector expanding by 11.5 percent owing to rapid progress with the implementation of major projects.
The pickup in growth came despite a 1.2 percent contraction in hydrocarbon real GDP as a result of falling crude oil production and flat production at LNG facilities. According to estimates by the QNB Group, real GDP growth is expected to continue to pick up during 2014 as hydrocarbon production stabilizes and non-hydrocarbon growth remains high. “Overall, the new GDP data are in line with our expectations for real GDP growth of around 6.8 percent in 2014. In 2015-16, we expect momentum to continue to gather steam owing to the ongoing implementation of major projects, with growth rising to an average of 7.7 percent,” said the QNB report.
Strong growth in the non-hydrocarbon sector has been driven by a pickup in major infrastructure investment projects since the middle of 2013. This has led to rapid growth in construction, which expanded by 19.6 percent in real terms in the year to Q1 2014 and contributed 2.3 percent to overall growth. Rising project activity has also led to a rapid increase in the number of workers being employed in Qatar, pushing up population growth to 11.6 percent in the year to end-March 2014. In turn, this has helped boost growth in services sectors.
Services contributed 4.2 percent to total real growth, with sectors such as financial services and trade, restaurants and hotels fairing particularly well. The data confirm the continued process of diversification in Qatar away from hydrocarbons. With hydrocarbon production expected to continue plateauing in the medium term, the non hydrocarbon sector is projected to play a more significant part in driving growth in the economy.Back to all Construction News
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