IMF Executive Board Concludes 2014 Article IV Consultation with Qatar

Press Release No. 14/197
May 6, 2014

On April 18, 2014, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Qatar.1

As the world’s largest exporter of liquefied natural gas (LNG), Qatar has turned into an important global financial investor, labor importer, and donor. Growth averaged 14 percent over the past decade with per capita GDP reaching $100,000, the highest in the world. Having successfully completed a strategy to develop natural gas resources, the authorities have embarked on a large public investment program to advance economic diversification and prepare for the FIFA 2022 World Cup.

Qatar’s macroeconomic performance has remained strong. GDP growth slowed from 13 percent in 2011 to 6.2 percent in 2012, mostly due to the self-imposed moratorium on additional hydrocarbon production from the North Field. Growth was 6.5 percent in 2013, driven by strong expansion in the nonhydrocarbon sector. The negative spillovers from sluggish global growth and financial market volatility have been limited. Price pressures are subdued at present, with March 2014 inflation at 2.6 percent year-on-year. Fiscal and external sector continue to exhibit large surpluses thanks to high hydrocarbon prices.

The baseline macroeconomic outlook is positive. GDP growth could stay around 6 percent in 2014, with public investments keeping growth around 6–7 percent over the medium term. Inflation is projected to stay benign at 3 to 4 percent going forward, partly owing to the anticipated decline in commodity prices, including for food, and the fixed exchange rate. Potential challenges include the risk of over-heating in the near term and over-capacity in the medium term as a result of the public investment program. The possibility of a sharp decline in oil and gas prices remains the main medium-term risk; however, the authorities have ample fiscal and external buffers to deal with contingencies.

The macroeconomic policy framework is being strengthened by a number of ambitious reforms in the area of fiscal policy and institutions, financial regulation, macroprudential policies, liquidity management, and development of the local debt market. In particular, the authorities have been saving the large fiscal surpluses, and have started introducing a medium-term focus into the budget process. The financial regulatory agenda has centered on establishing an umbrella regulatory body and issuing a final Basel III circular. The authorities are also supporting economic diversification through measures to further financial deepening and private sector development.

Executive Board Assessment

Executive Directors welcomed Qatar’s continued strong macroeconomic performance, underpinned by solid non-hydrocarbon growth and stable prices. The large fiscal and external surpluses have rendered the economy resilient against potential external shocks and the outlook is favorable. Directors agreed that continued prudent macroeconomic management and efforts to diversify the economy will help ensure long-term growth and stability.

Directors emphasized the importance of a well-calibrated implementation of the large public investment program, and encouraged the authorities to remain vigilant about possible inflationary pressures. If signs of overheating emerge, action should be taken to smooth capital spending, and deploy liquidity withdrawal operations and further macroprudential measures in case of excessive credit growth or risk-taking. Directors noted the authorities’ efforts to ease price pressures by addressing bottlenecks in the supply chain.

Directors advised the authorities to enhance the public investment management framework and improve the efficiency of public spending. They saw merit in a comprehensive approach, including rigorous procedures for the selection and appraisal of projects, underpinned by substantial capacity building and deeper cooperation among various stakeholders. In this regard, they welcomed the authorities’ plan to set up a Public Investment Management Unit.

Directors commended the authorities for pursuing ambitious fiscal reforms, such as the commitment to limit spending over-runs, a medium-term focus in the budget process, performance budgeting, and setting up of the macro-fiscal unit. They encouraged timely implementation of these reforms, and recommended that, going forward, the annual budgets should be based on realistic hydrocarbon price assumptions and a more detailed multi-year expenditure framework.

Directors commended the progress made in enhancing financial sector regulation. They welcomed issuance of the final Basel III circular and the three-year Strategic Plan for Financial Regulation. Directors observed that banks remain well capitalized, liquid, and profitable. They suggested continued close monitoring of lending standards, concentration risks, and cross-border activities of banks through an enhanced early warning system. Directors also saw further scope to improve liquidity management.

Directors took note of the authorities’ efforts to enhance diversification by supporting financial deepening and private sector development. They agreed that priority should be given to further improving the business environment and the quality of education. Directors looked forward to continued improvements in the area of macroeconomic statistics.

Qatar: Selected Economic and Financial Indicators, 2010-15 1/
          Est. Proj. Proj.



2010 2011 2012 2013 2014 2015
    (Annual change in percent)      

Production and prices


Real GDP

  16.7 13.0 6.2 6.5 5.9 7.1

Hydrocarbon 2/

  28.9 15.7 1.2 0.1 -1.0 0.9


  8.6 10.8 10.3 11.4 10.7 11.0

CPI inflation (average)

  -2.4 1.9 1.9 3.1 3.5 3.5
    (Percent of GDP on fiscal year basis) 3/    

Public finance


Total revenue

  31.4 34.6 40.1 41.5 38.8 35.7

Hydrocarbon revenue

  19.5 24.1 25.0 24.6 22.5 20.0

Other revenue

  11.9 10.5 15.0 16.9 16.4 15.7

Total expenditure and net lending

  28.9 28.2 30.6 30.4 31.2 30.9

Current expenditure, of which

  20.0 20.3 23.3 22.1 22.0 22.0

Wages and salaries

  4.6 4.6 4.9 5.6 5.6 5.6

Capital expenditure

  8.9 7.9 7.3 8.2 9.2 8.9

Overall fiscal balance (deficit -)

  2.5 6.4 9.5 11.1 7.6 4.9
    (Annual change in percent)      



Broad money

  23.1 17.1 22.9 19.6

Credit to private sector

  7.6 19.2 13.5 13.5
    (Billions of U.S. dollars unless otherwise noted)  

External sector


Exports of goods and services

  77.8 121.7 143.6 148.1 148.5 143.6

Imports of goods and services

  -29.7 -43.8 -54.7 -59.0 -63.1 -67.0

Current account

  23.8 52.0 62.3 62.6 54.3 46.1

In percent of GDP

  19.0 30.3 32.4 30.9 25.4 20.5

Central Bank reserves, gross

  30.7 16.3 32.7 41.7 46.2 49.3

in months of imports of goods and services 4/

  8.4 3.6 6.6 7.9 8.3 8.3

Exchange rates (Riyals/US $)

  3.6 3.6 3.6 3.6

Real effective exchange rate (percent change)

  -5.5 -5.1 1.4 -0.1

Sources: Data provided by the authorities; and IMF staff estimates and projections.

1/ The staff forecasts are based on information available as of March 26, 2014. The GDP and balance of payments data have been updated to reflect recent data releases.

2/ Staff estimates; include crude oil, LNG, propane, butane, and condensates.

3/ Fiscal year begins in April; GFSM 1986.

4/ Next 12 months.

1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here:


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