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Economic Overview

The economy of Qatar relies on oil and gas which accounts for 50% of GDP, 85% of export earnings and 70% of government revenue. Oil and gas have made Qatar one of the world’s fastest growing and higher per capita income countries in recent years. Sustained high oil prices and increased natural gas exports until late 2008 have helped build Qatar’s budget and trade surpluses and foreign reserves. Presently, it has 15.21 billion barrels of proven crude oil reserves, representing 3.2% of the GCC oil reserves – almost 1.1% of the total world oil reserves. At its current level of production of about 776 thousand barrels per day, crude oil reserves will last for 54 years. Qatar is the richest among the GCC countries in terms of natural gas reserves, which stood at 25.26 trillion cubic meters at the end of 2008, representing 61% of the GCC total natural gas reserves and around 14% of the world reserves. Qatar can be seen as one of the most stable countries in the GCC region, given its combination of valuable natural resources and prudent macroeconomic management. The economic boom continued until late 2008 on the back of higher global energy demand. Over the past six years, the economy grew over five times in size during 2002 to 2008, at an average annual rate of 31.6% from $19.4 billion in 2002 to $100.4 billion in 2008 on the back of steady rising energy prices and surging oil and gas production. Qatar has permitted substantial foreign investment in the development of its gas fields during the last decade and is expected to become the world's top Liquefied Natural Gas (LNG) exporter in the near future. Qatar is also trying to attract foreign investment in the development of its non-energy projects by further liberalizing the economy. The drop in oil prices in late 2008 and the global financial and economic crisis reduced Qatar’s budget surplus and slowed the pace of investment and development projects in 2009. Economic growth is likely to rebound and the economic policy is focused on developing Qatar’s nonassociated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas sector is still dominant in the economy.

Macroeconomic Overview


Qatar's macroeconomic indicators just keep on getting better and better. Growth of the economy depends heavily on oil and gas sectors. A continued sharp upturn in energy prices, rising oil and gas production and strong private sector activity during 2003 to 2008 resulted in a strong growth of the Qatari economy. Consequently, the nominal GDP grew by the highest ever annual rate of 41.3% to $100.4 billion in 2008 compared to a growth of 24.8% to US$71 billion in 2007. However, the economy shrank at the rate of (-16.4%) in 2009 to $83.9 billion, mainly attributed to the global financial and economic crisis. The economy is likely to rebound sharply and grow by 32.1% and 18.9% to $110.8 billion and $131.8 billion in 2010 and 2011, respectively. Real GDP recorded a sharp growth of 15.8% in 2008 compared to a 13.7% growth in 2007. Real growth decreased to 9% in 2009 due the global crisis and the world oil market slump. Real growth of the economy is expected at 18.5% and 14.3% in 2010 and 2011, respectively.


Prior to 2004, inflation remained subdued in Qatar but reached an all-time high rate of 15.1% in 2008 compared to 13.8% in 2007. The extraordinary rise in consumer price index during 2004 - 2008 was largely due to rising property prices, demand pressures for goods & services and depreciation of the US Dollar against world major currencies. Inflation slowed down sharply to -4.9% in 2009 due to the global financial and economic crisis. CPI inflation rate is likely to remain at manageable rates of (1%) and (3%) in 2010 and 2011, respectively due to wise and timely government policies of fiscal and monetary management.

Fiscal Position

A sharp upturn in oil prices has improved government’s fiscal position enormously. Almost 70% of fiscal revenues come from oil and gas. This dependence on oil and gas export revenues makes the economy highly sensitive to fluctuations in international energy prices. Much of Qatar’s industrialization program is now complete; therefore, the government is determined to keep domestic expenditures to a minimum level until the country’s external debt repayments are over. A robust growth in oil prices in the past five years, coupled with a tight fiscal regime, led to a substantial windfall gains for the government revenues during 2004-2008. Qatari economy achieved a budget surplus of 8.5% of GDP in 2008 compared to 11.8 % of GDP in 2007. Fiscal surplus declined to 2% of GDP in 2009 due to the global crisis, which is likely to increase to 6.2% of GDP each in 2010 and 2011.


Qatar continues to operate a fixed exchange rate regime. Although officially the Qatari Riyal (QR) is pegged to the Special Drawing Rights (SDR) at SDR: QR 4.7619, in reality it is pegged to the US Dollar. The current rate of US$: QR3.64 has been broadly maintained since the early 1980s. Although the US Dollar has been depreciated against the Euro, the Japanese Yen, the British Pound Sterling, etc., this link is likely to be maintained in the medium-term. There is little rationale for removing the peg while Qatar’s principal exports (oil and gas) remain denominated in the US Dollars. The Central Bank of Qatar will continue to support this peg. Total reserves excluding gold stood at US$10.1 billion at the end of 2008 compared to US$9.4 billion at the end of 2007, and stood at $10 billion in 2009. Foreign reserves minus gold are expected to rise marginally to $10.5 billion and $10.7 billion at the end of 2010 and 2011, respectively.

External Accounts

With its abundant hydrocarbon reserves, and a population of 1.22 million, Qatar has one of the highest per capita income in the Arab world. Export volumes have maintained a rising trend since 2004, resulting in trade and current account surpluses. A sharp upturn in oil prices resulted in huge surpluses during 2004 to 2008. The current account surplus stood at an all time high level of US$33.1 billion (33% of GDP) in 2008 compared to US$21.8 billion (30.7% of GDP) in 2007. The current account surplus decreased to $13.8 billion (16.4% of GDP) in 2009 due to the global crisis and the world oil market slump. The balance of payments surpluses are expected to rise to $27.8 billion (25.1% of GDP) and $51.9 billion (39.3% of GDP) in 2010 and 2011, respectively.
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