IMF: Qatar’s Economy Expected to Grow Over 4% Due to LNG Expansion
Qatar’s economy is expected to grow by 2% in 2024-2025. In the long term, growth is expected to average 4.75%, according to the International Monetary Fund (IMF) report on Tuesday.
Qatar’s Growth
Qatar’s economy is growing in the short term because of government spending, benefits from the ongoing liquefied natural gas (LNG) expansion, and strong tourism.
In the medium term (2025 and beyond), LNG production growth and early benefits from the Third National Development Strategy (NDS3) will help the economy. NDS3 focuses on improving government systems, making structural changes, and ensuring long-term development.
Inflation (rising prices) is expected to slow down to 1% in the short term due to stable prices and better supply. In the medium term, inflation is likely to settle at around 2%, in line with global trends.
Hydrocarbon Prices
Qatar’s large LNG expansion will keep its budget and trade surplus strong in the medium term. However, as global hydrocarbon prices fall, these surpluses will shrink as a percentage of GDP. This means Qatar will rely more on selling larger volumes of LNG rather than high prices. The global energy market is also shifting toward renewable energy.
In 2023, lower hydrocarbon prices reduced Qatar’s trade surplus to 17% of GDP and its budget surplus to 5.5% of GDP. These declines continued in 2024, according to the IMF.
Long-term Challenges
Even though LNG expansion ensures steady income, Qatar must prepare for a future where the world depends less on hydrocarbons.
Risks to Qatar’s economy include:
- A global economic slowdown, which could reduce demand for LNG and other exports.
- Unstable global financial markets and changes in commodity prices.
- Regional conflicts, which have had little impact so far but could lower tourism, reduce foreign investment, and make LNG prices more unstable.
- Weakness in Qatar’s real estate sector, though strong tourism and 2023 policy changes may help.
Over time, the global natural gas supply will increase, which might push prices down. However, if hydrocarbon prices remain high and Qatar speeds up its NDS3 reforms, its economic outlook could improve.
Published: 12th February 2025
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