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Posted On: 15 December 2008 08:33 am
Updated On: 12 November 2020 02:09 pm

Qatar economy could grow by 10% in 2009

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Qatar's economy could grow 10.3 percent in 2009 despite the global financial turmoil as it expands exports of liquefied natural gas, making it the world's fastest-growing economy, Samba Financial Group said on Sunday. Still, real economic growth in the world's biggest exporter of liquefied natural gas would slow from the 19.6 percent forecast for this year as a credit crunch causes project delays and cancellations, the Saudi bank said in a research note. "Qatar's strong economic performance is being fuelled mainly by growth in the country's LNG exports," Samba said. "Qatar is less exposed than other Gulf oil exporters to changes in oil prices as its increasing LNG exports are based on a variety of long-term contract prices (often 20-25 years) that vary in their relationship to oil prices." Crude prices have fallen more than $100 a barrel since hitting record levels above $147 a barrel in July. With producer group OPEC expected to slash output this week, economists have been cutting back growth forecasts of Gulf states, including Saudi Arabia and the United Arab Emirates. Qatar was on track to increase LNG output capacity to 77 million tonnes per year in 2010, Qatar's oil minister said this month. The hydrocarbon sector would expand 14.1 percent next year while growth in the non-oil sector would fall sharply to 6.6 percent from 15 percent this year, Samba said. "Qatar's LNG exports are projected to continue growing strongly, helping keep the fiscal and current account balances in large surplus, despite low oil prices," Samba said. The Gulf state would delay or cancel at least some of the $220 billion in projects it has in the pipeline due to high financing costs and reduced availability of funding, Samba added. With oil at $40 to $50 a barrel, Qatar's fiscal position would probably shift to deficit, it said. Meanwhile, inflation in Qatar - where per capita income should exceed $75,000 in 2008 - would slow to 9 percent next year from a record 16.1 percent this year, Samba said. (Reuters)