The Economy of Qatar

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 By Nader Abou Zahra

Qatar is located in Western Asia and occupies the small Qatar Peninsula on the northeastern coast of the Arabian Peninsula and shares its sole land border with Saudi Arabia to the south with the rest of its territory surrounded by the Persian Gulf. Qatar’s population as of the beginning of 2022 is 2.7 million of which 88% are expats.

Qatar enjoys among the highest gross domestic product (GDP) per capita (PPP) in the world with 145,697 USD in 2021.

Qatar’s gross domestic (GDP) product is expected to climb from 161 billion USD in 2021 to 172 billion SD this year, 181 billion USD in 2023, 191 billion USD in 2024, and 201 billion USD in 2025.

The Government is still committed to developing the country on various fronts in line with Qatar 2030 National Vision; Qatar’s budget for 2022 is set to have a total expenditure of 204.3 billion QAR (56 billion USD).

Despite the repercussion of the COVID-19 pandemic, the Qatari economy recorded a remarkable positive performance at various levels due to rational policies, a flexible economic approach to crisis management, and forward-looking plans, which enhanced Qatar’s ability to quickly recover and adapt to changes, ensure business continuity and complete vital projects in the infrastructure sector and other sectors.

The economy of Qatar is based on the oil and natural gas sectors; proved natural gas reserves represent 13% of the world total and the third-largest in the world, while proved oil reserves exceed 25.2 billion barrels; Qatar's liquefied natural gas (LNG) industry has attracted tens of billions of dollars in foreign investment and made Qatar the world’s largest exporter for LNG.

Qatar’s manufacturing sector is a major driving force in Qatar’s economic diversification. These evolutionary industries power the goals of the Qatar National Vision (QNV) 2030, which aims to transform Qatar into an advanced country capable of sustaining its development and ensuring high living standards for its people.

Qatar National Manufacturing Strategy focuses on establishing advanced manufacturing value chains with the aim of transforming Qatar into a major hub for production; with Qatar’s high-caliber talent pool, unparalleled market access and connectivity, and state-of-the-art free zones, Qatar is emerging as a global manufacturing destination.

According to the 2022 Index of Economic Freedom, Qatar’s economy is the 44th freest and it is ranked 3rd among 14 countries in the Middle East and North Africa region; its overall score is above the regional and world averages.

Qatar has taken steps recently to further attract foreign direct investment (FDI) and innovation by passing a foreign investment law that allows foreign firms to have up to 100% ownership in most economic sectors and a Public-Private Partnership (PPP) Law to promote economic diversification.

Qatar has become an attractive destination for global investors; the country has attracted over 4 billion QAR (1.1 billion USD) Foreign Direct Investment (FDI) capital expenditure in 2021 according to Investment Promotion Agency Qatar (IPA Qatar); the growing foreign investments in Qatar illustrates the trust of global investors in the country’s economy.

These included 82 new FDI projects of which the business services and Software & IT accounted for more than 50%; the other projects include communications, financial services, and industrial equipment. The year 2021 also witnessed 1,100 new foreign commercial establishments across the business licensing platforms, which contributed to creating roughly 4,200 jobs in the market.

 

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