Qatar’s economy is gradually bouncing back after a slower year following the 2022 FIFA World Cup, according to the International Monetary Fund (IMF).
The IMF projects Qatar’s short-term economic growth to reach 2% before climbing to about 4.75% in the medium term, as outlined in its Article IV consultation report.
Qatar experienced slower growth over the past two years, with its GDP dropping from 4.2% in 2022 to 1.2% in 2023. This decline was largely due to reduced construction activity and slower growth in services after the World Cup. However, headline inflation is expected to drop to 1% this year, stabilizing at around 2% in the coming years.
“After the post-World Cup slowdown in 2023, Qatar’s economy is showing signs of a steady recovery,” the IMF stated.
Tourism Boosts Qatar’s Recovery
Tourism has been a key factor in Qatar’s economic revival. By October 2024, Qatar had welcomed 4 million international visitors—a 26% increase compared to the same period in 2023.
Visitors from the Gulf region made up 41.8% of the total, while other major visitor markets included India, the UK, the US, Germany, and China.
LNG Expansion Powers Medium-Term Growth
The IMF highlighted that Qatar’s medium-term growth will benefit from “significant” liquefied natural gas (LNG) production and reforms under its third National Development Strategy (NDS3).
Qatar plans to increase LNG production from 77 million tonnes annually to 142 million tonnes by 2030, marking an 85% rise. A new North Field expansion project announced in February 2024 is expected to add 16 million tonnes of LNG annually, building on the North Field East and North Field South phases.
In 2023, Qatar ranked among the world’s top LNG producers alongside the US, Australia, Russia, and Malaysia, according to the US Energy Information Administration.
Economic Diversification through NDS3
Qatar’s NDS3 program is driving economic diversification by attracting foreign investment, enhancing digital competitiveness, and fostering a skilled workforce. Key targets for 2030 include growing the economy by 4% annually and attracting $100 billion in foreign direct investment (FDI).
The IMF noted that NDS3 aims to transition Qatar’s economy from a state-led model to a more private sector-driven and knowledge-based framework. This includes focusing on innovation, trade diversification, and strengthening the business environment.
“Achieving Qatar’s vision requires advancing human capital and increasing economic complexity,” the IMF said.
Fiscal Stability and Future Plans
Despite using fiscal space in 2023 to support its economy, Qatar’s fiscal position remains robust. The IMF praised the country’s plans for a five-year medium-term budget and program-based budgeting.
The IMF encouraged Qatar to use its positive economic outlook to focus on revenue diversification, such as introducing a value-added tax (VAT), aligning energy prices, and improving spending efficiency to support private sector growth.
The IMF’s executive board will review Qatar’s Article IV consultation findings in January 2025.
