Qatar is a Resilient Economy

Press Release

The Asian Ambassadors’ Group under the Chairmanship of the Ambassador of Malaysia, Dato’ Ahmad Jazri Mohd Johar organized an inaugural Lunch Talk on 29th February 2016 at Holiday Villa Hotel & Residence, Doha, Qatar. The members of the Asian Group consist of 20 Ambassadors including the seven ASEAN embassies in Qatar namely Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam and is currently chaired by Singapore and Malaysia as the Vice Chairman. The members of the Asian Ambassadors and Charge de Affaires were present in the event. Dr. R. Seetharaman, CEO of Doha Bank was invited and spoke on the topic “Qatar 2016 Budget and the Sustainability of Qatar’s Economy for 2016 and Beyond”.

Dr. R. Seetharaman gave insight on Global economies. He said “Even after seven years since the Global financial crisis the sustainable growth is not visible in global economy. Monetary easing had continued since the global financial crisis from US, Eurozone and Japan Central Banks.The Fed had commenced rate hike last December and it needs to be seen whether it will continue with so much volatility in global financial markets this year and uneven US economic recovery.

According to IMF recent forecast Global growth projected at 3.4 percent in 2016. The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth.”

Dr. R. Seetharaman highlighted about Qatar economy. He said “Qatar’s 2016 growth is expected to be 4.3%. Qatar’s fiscal and external positions to shift to deficits from 2016. However Qatar has built a large net asset position that will help it weather the current lower hydrocarbon price environment. Qatar has budgeted for revenues of 156 billion riyals and expenditures of 202.5 billion riyals in 2016. Health, education and infrastructure accounted for the largest share of the 2016 expenditure. Major infrastructure expenditures amounting to 50.6 billion riyals would include railways, the new Doha port, several large roadways and the expansion of electricity, water and sewage networks. According to recent S&P report, Qatar has “significant” strength in defending its fixed exchange parity with the dollar due to availability of reserves to cover the monetary base and current account payments over the next four years. Qatar economy is sustainable in the long term amidst short term challenges. Qatar also has AA’ long-term rating from S&P, with a stable outlook. Qatar is a resilient economy.”

Dr. R. Seetharaman gave insight on Qatar Banking Sector. He said “Qatar Banking Balance sheet growth was more than 10% YTD in Dec 2015 and loan growth was more than 15% YTD. In 2015 the real estate sector lending was more than 27% YTD, retail sector was close to 17% YTD, contracting sector more than 23% YTD and service sector was more than 6% YTD. The customer deposit growth was more than 8% YTD. In 2016 the deposits from public sector are expected to come down. Qatari banks had widened their funding base on account of weak domestic funding. There could be challenges to lending on account slowdown in infrastructure segment. The slowdown in lending and surge in cost of funding may impact Qatari Banks.”

Dr. R. Seetharaman highlighted on ASEAN GCC bilateral relationships. He said “Singapore in September 2013 scored the first free trade agreement (FTA) with the GCC. Mubadala Petroleum of the UAE has energy production in Indonesia and Thailand, and exploration efforts in Vietnam and Malaysia. Gulf interests in ASEAN are expanding to other sectors, including to real estate and finance. In August 2014, Ooredoo of Qatar launched a telecoms network in Myanmar. UAE and Malaysia signed deals in 2013 to develop a new financial district in Kuala Lumpur. Malaysia and UAE have agreement for avoidance of double taxation.”