How did COVID-19 affect Qatar's economy?

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PwC Qatar published the second edition of the Qatar Economy Watch report which outlines PwC’s outlook on the State of Qatar’s economy, including the short-term economic impact of the COVID-19 crisis, the opportunities the crisis has brought and how Qatar has capitalized on its well established resilience and crisis management framework.

The report also gives an in-depth status review on Qatar’s long-term efforts towards becoming a knowledge-based economy.

Bassam Hajhamad, PwC Qatar Country Senior Partner, notes: “Qatar’s economy is being impacted by a dual shock with the decline of the economic activity due to COVID-19 pandemic across various sectors and the immense shock of lower energy prices. When it comes to the impact of the oil market, Qatar is better situated than other hydrocarbon exporters - thanks to its natural gas reserves - and should be better positioned to weather these shocks.

The current environment presents both opportunities and challenges to Qatar. It accelerates existing moves on national digitisation and localisation, as part of developing a more resilient knowledge-based economy. This knowledge-based economy addresses Qatar’s aspirations to be one of the nations leading with “Digital Innovation” to create high-quality and meaningful jobs for its local citizens and residents.”

The Qatar Economy Watch report outlines the four main pillars crucial for an economy to become a resilient knowledge-based one:

1. Localised skills and human capital

2. Intelligent and secured information infrastructure

3. Forward-looking policies and regulations

4. Clustered innovation systems

The report examines the status of the efforts being made nationally towards each one of the pillars. Examples of those national efforts include the localisation drive, attracting foreign investment through business environment reforms, privatisation measures, and support to R&D and innovation. As a key to building a resilient knowledge-based economy, there was already a strong trend towards digitisation in Qatar, however, the COVID-19 crisis has turbo-charged digitisation needs, including home working, online meetings, e-learning, and Artificial Intelligence applications namely in education and healthcare.

Furthermore, alongside these diversification and digitisation efforts, Qatar’s second gas boom is about to get underway and may even benefit as some competitors struggle because of the current weakness in energy markets. In addition to the expansion in the North field, these solid government finances will provide a conducive environment for private sector growth.

Despite the challenging current environment and uncertainty, PwC’s outlook is that Qatar will remain proactive and responsive to changing environments, efficiently adapting their short-term actions to their long-term plans. Shifts in global markets, political disagreements, and environmental shocks are all considerations we expect Qatar to address as they accelerate the execution and impact of Qatar’s National Vision 2030.