## 1qatea2019001

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### Outlook and risks
- Real GDP: projected growth of 3.2 in 2020; recent estimated growth of 2.2 in 2018 and 1.6 in 2017.
- Near-term growth drivers:
  - Increased gas production, infrastructure programs, slower pace of fiscal consolidation, and adequate credit growth.
  - Medium-term support from increased gas production from the Barzan project and planned increase in LNG production capacity by 40 percent.
- Inflation:
  - Projected to peak at 3.7 percent in 2020 with the introduction of a VAT, but converge to 2 percent in the medium term.
- Main downside risk:
  - Lower-than-projected hydrocarbon prices would deteriorate external and fiscal positions and raise public debt.
- Other risks:
  - Rising trade and geopolitical tensions that could undermine investor confidence and weaken fiscal and external positions.
- Mitigants:
  - Substantial buffers, prudent policies, and ability to contain adverse macro-financial implications of downside risks.

### Fiscal policy and public finances
- Fiscal consolidation and balances:
  - Fiscal position improving to about 3.0 percent of GDP in 2019 from 2.3 percent in 2018.
  - Central government fiscal balance projected at 3.4 percent of GDP in 2020.
- Revenue and expenditure (2020 projections):
  - Total revenue: 31.7 percent of GDP.
  - Expenditure: 28.3 percent of GDP (Current 17.2 percent; Capital 11.2 percent).
- Policy priorities and reforms:
  - Continue enhancing non-hydrocarbon revenues, including introduction of a VAT (VAT introduction postponed to 2020).
  - Contain growth of the wage bill and put public investment on a downward path; wage expenditure as a ratio of GDP continued on a declining path.
  - Accelerate reduction of utility subsidies combined with strengthened social protection; removal of subsidies on electricity and gas would yield additional revenue of about 4 percent of non-hydrocarbon GDP (price-gap approach estimate).
  - Strengthen fiscal policy frameworks to avert procyclicality, mitigate risks, and ensure intergenerational equity; use fiscal indicators emphasizing intergenerational equity and indicators to better manage oil price volatility.
  - Develop a medium-term budget framework (MTBF) and move toward a performance-based medium-term expenditure framework (MTEF).
  - Improve coordination among fiscal authorities, QCB and QIA; establish an independent tax authority under the Ministry of Finance.
  - Publish comprehensive budget information, including fiscal risks, budget execution data, and composition of QIA’s assets.
- Budget actions and taxes:
  - 2019 budget: total expenditure growth limited to about 2 percent, increased allocations to health and education.
  - Excise taxes introduced: 100 percent on tobacco, 50 percent on all carbonated drinks, and 100 percent on all energy drinks.

### External sector and reserves
- Current account:
  - Envisaged current account surplus of about 4.6 percent of GDP for 2019; projected current account of 4.1 percent of GDP in 2020.
  - Moderate surpluses expected over the medium term.
- External position:
  - External position assessed as weaker than implied by fundamentals and desired policy settings; gradual fiscal consolidation would help close the estimated current account gap.
- Central bank reserves (excluding QIA assets):
  - Reported as 30.5 in 2018 and projected at 41.2 in 2020 (units as in source).
  - Reserves in months of imports: 5.5 in 2018 and 6.9 in 2020.
- External debt:
  - 101.1 percent of GDP in 2018 and projected 98.3 percent of GDP in 2020.
- Trade flows (annual percent changes shown):
  - Exports: 84.5 in 2018 and 80.4 projected in 2020.
  - Imports: -33.2 in 2018 and -34.6 projected in 2020.
- Note on sovereign assets:
  - QIA assets estimated at about US$320 billion (166 percent of GDP and 345 percent of public debt).

### Financial sector stability, liquidity, and credit
- Liquidity and monetary policy:
  - QCB’s monetary policy broadly followed increases in the U.S. Federal Reserve rate given the peg to the U.S. dollar and robust non-oil GDP growth.
  - Recovery in non-resident deposits and foreign bank funding supported credit expansion: non-resident deposits recovered by 23 percent y-o-y by December 2018; foreign bank funding up by 23 percent.
  - Private-sector credit increased by 13 percent y-o-y by December 2018.
  - System-wide loan-to-deposit ratio: 103 percent (slightly exceeds QCB’s guidance of 100 percent).
- Banking sector soundness (end-September 2018 metrics):
  - Capital adequacy ratio (CAR): 16 percent.
  - Return on assets (ROA): 1.6 percent.
  - Non-performing loans (NPL) ratio: 1.7 percent.
  - Provisioning ratio: 83 percent.
  - Liquid-asset-to-total-asset ratio: 29.7 percent.
- Market indicators (2018):
  - Stock market index rose by 23 percent in 2018.
  - Bond yields declined, reflecting positive investor sentiment.
- Risks and monitoring:
  - Softening of real estate prices: real estate prices fell by 8 percent on average in 2018; QCB real estate price index shows a 15 percent decline during 2017–18 following an 82 percent increase during 2012–16.
  - Staff recommended additional indicators such as vacancy rates to assess real estate developments and closer monitoring of banking sector assets.
  - Policy recommendations: continue risk-based supervision, enforce loan-to-deposit ratio to encourage banks to reduce leverage, strengthen modalities for exchange of information between fiscal and monetary authorities, and enhance liquidity forecasting.

### Structural reforms and diversification
- Reform agenda:
  - Emphasis on private sector-led growth and economic diversification via business environment improvements, SEZs, labor law reforms, increased foreign ownership limits, and privatization.
  - SEZs can be helpful short term but should not replace economy-wide structural reforms.
- Business environment priorities:
  - Improve contract enforcement and strengthen competition via insolvency reform.
  - Use domestic and export-market competition to hold government-supported beneficiaries accountable.
- Investment and QIA guidance:
  - QIA’s asset allocation strategy should consider Qatar’s dependence on hydrocarbons and the trade-off between domestic investment and financial accumulation.
  - Priority sectors in the Second National Development Strategy: manufacturing, finance, professional and scientific activities, tourism, logistics, and information and communication.
- Labor, inclusion, and gender:
  - Education and labor market measures to complement public-sector employment reform.
  - Laws ensuring equal remuneration and supporting gender equality recommended to support inclusive growth.
- Financial inclusion and fintech:
  - SME lending remains very low at around 2 percent of total credit.
  - Fintech to be initially tested in sandbox environment with emphasis on consumer protection and data privacy/cybersecurity.

### Selected economic and financial indicators (key series preserved from source table)
- Real GDP (2013 prices): 2015: 3.7; 2016: 2.1; 2017: 1.6; 2018: 2.2; 2019: 2.6; 2020: 3.2
- Hydrocarbon (real GDP contribution): 2015: -0.6; 2016: -0.9; 2017: -0.7; 2018: -1.1; 2019: 0.4; 2020: 1.8
- Nonhydrocarbon (real GDP contribution): 2015: 8.5; 2016: 5.3; 2017: 3.8; 2018: 5.3; 2019: 4.6; 2020: 4.3
- CPI inflation (average): 2015: 1.8; 2016: 2.7; 2017: 0.4; 2018: 0.2; 2019: 0.1; 2020: 3.7
- Total revenue (percent of GDP): 2015: 43.6; 2016: 30.9; 2017: 26.9; 2018: 31.7; 2019: 32.8; 2020: 31.7
- Expenditure (percent of GDP): 2015: 42.3; 2016: 40.1; 2017: 33.5; 2018: 29.4; 2019: 29.8; 2020: 28.3
  - Current: 2015: 28.5; 2016: 21.5; 2017: 18.6; 2018: 15.5; 2019: 17.1; 2020: 17.2
  - Capital: 2015: 13.8; 2016: 18.6; 2017: 14.8; 2018: 13.9; 2019: 12.6; 2020: 11.2
- Central government fiscal balance (percent of GDP): 2015: 1.3; 2016: -9.2; 2017: -6.6; 2018: 2.3; 2019: 3.0; 2020: 3.4
- Broad money (annual percent change): 2015: 3.4; 2016: -4.6; 2017: 21.3; 2018: -6.5; 2019: 4.3; 2020: 7.9
- Credit to private sector (annual percent change): 2015: 19.7; 2016: 6.5; 2017: 6.4; 2018: 13.0; 2019: 4.8; 2020: 9.0
- Exports (annual percent change): 2015: 77.3; 2016: 57.3; 2017: 67.5; 2018: 84.5; 2019: 80.2; 2020: 80.4
- Imports (annual percent change): 2015: -28.5; 2016: -31.9; 2017: -30.8; 2018: -33.2; 2019: -33.9; 2020: -34.6
- Current account balance (US$ billions): 2015: 13.8; 2016: -8.3; 2017: 6.4; 2018: 18.0; 2019: 8.9; 2020: 8.4
- Current account balance (percent of GDP): 2015: 8.5; 2016: -5.5; 2017: 3.8; 2018: 9.3; 2019: 4.6; 2020: 4.1
- External debt (percent GDP): 2015: 88.4; 2016: 127.2; 2017: 99.6; 2018: 101.1; 2019: 106.7; 2020: 98.3
- Central bank reserves 2/ (US$ billions): 2015: 37.2; 2016: 31.7; 2017: 14.9; 2018: 30.5; 2019: 44.3; 2020: 41.2
- Central bank reserves (months of imports): 2015: 7.0; 2016: 6.1; 2017: 2.7; 2018: 5.5; 2019: 7.7; 2020: 6.9
- Exchange rate (Riyals/US$): 2015–2020: 3.6 (each year)
- Real effective exchange rate (percentage change): 2015: 11.0; 2016: 2.6; 2017: -1.1; 2018: -3.7; 2019: ...; 2020: ...

### Public-sector debt sustainability (Annex V — baseline and scenarios)
- Baseline nominal gross public debt (percent of GDP): 2016: 26.5; 2017: 46.7; 2018: 49.8; 2019: 48.4; 2020: 52.7; 2021: 45.9; 2022: 40.6; 2023: 37.1; 2023 (repeated): 33.3
- Public gross financing needs (percent of GDP): 2016: -6.3; 2017: 11.4; 2018: 7.8; 2019: 3.4; 2020: 0.2; 2021: 2.5; 2022: 4.3; 2023: -0.4; 2023 (repeated): 1.6
- Real GDP growth (percent) used in projections: 2016: 10.7; 2017: 2.1; 2018: 1.6; 2019: 2.2; 2020: 2.6; 2021: 3.2; 2022: 3.3; 2023: 2.7; 2023 (repeated): 2.3
- Effective interest rate (percent): 2016: 5.7; 2017: 3.9; 2018: 3.2; 2019: 3.2; 2020: 3.2; 2021: 3.1; 2022: 3.2; 2023: 3.2; 2023 (repeated): 3.2
- Sovereign spreads and ratings:
  - EMBIG (bp): 151
  - 5Y CDS (bp): 84
  - Ratings: Moody's: Aa3; S&P: AA-; Fitch: AA-
- Key identified debt-creating flows and contributions are tabulated with cumulative totals (e.g., cumulative identified debt-creating flows total: -33.4; cumulative change in gross public sector debt total: -16.5).
- Alternative scenarios include Historical (assumes high growth and fiscal balances) and Constant Primary Balance scenarios with specified paths for Real GDP growth and Primary Balance.

### Regulatory, supervisory, and AML/CFT developments
- Regulatory framework and supervision:
  - Banks are IFRS9 compliant; limited overall impact on capital adequacy.
  - Financial Stability and Risk Control Committee fully operational.
  - Shift toward risk-based supervision and thematic inspections.
  - Authorities strengthening early warning frameworks by introducing vacancy rate and other indicators.
- Real estate and contagion risks:
  - Real estate price dynamics: 82 percent increase during 2012–16; 15 percent fall during 2017–18 (QCB index); transactions volume and number down since 2013–14 peak.
  - Regional patterns: land prices in Al Daayen and Al Wakra behaved differently linked to projects.
  - Staff recommended adequate provisioning and early risk recognition, and development of additional metrics to supplement QCB’s index.
- AML/CFT:
  - Draft amendments to the AML/CFT law and implementation mechanisms are being considered; reforms should be expedited and implemented in line with FATF standards.
  - QCB uses its own tools for ML/TF risk assessment; further progress required to conduct fully risk-based AML/CFT supervision.

### Macroeconomic statistics, data adequacy, and Fund relations
- Data adequacy:
  - General assessment: Data provision has some shortcomings but is broadly adequate for surveillance.
  - Areas for improvement: real GDP quarterly estimates, price statistics (rent coverage), real estate statistics (disaggregated indices), government finance statistics (GFSM 2001 accrual accounts), reporting of Financial Soundness Indicators, and IIP reporting.
  - Qatar is a GDDS participant since December 2005 but has not implemented e-GDDS due to lack of a National Summary Data Page; SDDS assessment (2016) found eleven out of 15 categories met SDDS requirements.
- Relations with the Fund (as of February 28, 2019):
  - Membership: Joined September 8, 1972; Article VIII on June 4, 1973.
  - Quota: SDR Million 735.10 (100.00 percent of quota)
  - Exchange rate arrangement: Qatari riyal pegged to U.S. dollar at QR 3.64 = US$1.00 since July 2001; accepted obligations under Article VIII, Sections 2, 3, and 4(a).
  - Outstanding Purchases and Loans: None.

### Executive Board and staff assessment — key messages and recommendations
- Key judgments:
  - The fixed exchange rate regime remains appropriate and provides a clear and credible monetary anchor.
  - Qatar is well placed to weather hydrocarbon price shocks given significant buffers and prudent policies.
  - Gradual fiscal consolidation is appropriate to generate sufficient savings for future generations.
  - Strengthening fiscal policy frameworks, improving transparency, and advancing structural reforms will support sustained, inclusive, private sector-led growth.
- Principal staff recommendations (key items):
  - Pursue gradual fiscal consolidation to achieve adequate savings for future generations.
  - Enhance non-hydrocarbon revenues, including continuing work on the introduction of a VAT.
  - Contain growth of the wage bill and put public investment on a downward path.
  - Accelerate reduction of utility subsidies combined with strengthened social protection.
  - Strengthen fiscal policy frameworks to avert procyclicality and ensure intergenerational equity; improve coordination among fiscal authorities, QCB and QIA.
  - Accelerate adoption of a performance-based medium-term expenditure framework and publish comprehensive budget information including fiscal risks, budget execution data, and composition of QIA’s assets.
  - Closely monitor banking sector assets given softening real estate prices; consider introducing additional indicators such as vacancy rates.
  - Enforce the loan-to-deposit ratio to encourage banks to reduce leverage.
  - Further strengthen financial supervision and the regulatory framework to manage risks from financial innovation while ensuring consumer protection.
  - Continue structural reforms to support private sector-led growth, including improving contract enforcement, enhancing competition through insolvency reform, and addressing gender equality in remuneration.

*Source: IMF staff report for the 2019 Article IV consultation (QATAR: STAFF REPORT FOR THE 2019 ARTICLE IV CONSULTATION).*

### 3.7 percent in 2020 with the introduction of a VAT, but converge to 2 percent in the medium

### 3.7 percent in 2020 with the introduction of a VAT, but converge to 2 percent in the medium term.

### Outlook and risks
- Real GDP: projected growth of 3.2 in 2020; recent estimated growth of 2.2 in 2018 and 1.6 in 2017.
- Near-term growth drivers: increased gas production, infrastructure programs, slower pace of fiscal consolidation, and adequate credit growth.
- Main downside risk: lower-than-projected hydrocarbon prices, which would deteriorate external and fiscal positions and raise public debt.
- Other risks: rising trade and geopolitical tensions that could undermine investor confidence and weaken fiscal and external positions.
- Mitigants: substantial buffers, prudent policies, and ability to contain adverse macro-financial implications of downside risks.

### Fiscal policy and public finances
- Fiscal consolidation: envisaged to continue at a slower rate; fiscal position improving to about 3.0 percent of GDP in 2019 from 2.3 percent in 2018, and central government fiscal balance projected at 3.4 percent of GDP in 2020.
- Revenue and expenditure: Total revenue projected at 31.7 percent of GDP in 2020; Expenditure projected at 28.3 percent of GDP in 2020 (Current 17.2 percent; Capital 11.2 percent).
- Policy priorities:
  - Continue enhancing non-hydrocarbon revenues, including introduction of a VAT.
  - Contain growth of the wage bill and put public investment on a downward path.
  - Accelerate reduction of utility subsidies combined with strengthened social protection.
  - Strengthen fiscal policy frameworks to avert procyclicality, mitigate risks, and ensure intergenerational equity.
  - Use fiscal indicators emphasizing intergenerational equity and indicators to better manage oil price volatility.
  - Improve coordination among fiscal authorities, QCB and QIA; develop a medium-term budget framework and move toward a performance-based medium-term expenditure framework.
  - Publish comprehensive budget information, including fiscal risks, budget execution data, and composition of QIA’s assets.

### External sector and reserves
- Current account: envisaged current account surplus of about 4.6 percent of GDP for 2019 in line with projected oil prices and slower import growth than GDP; projected current account of 4.1 percent of GDP in 2020.
- External position: weaker than implied by fundamentals and desired policy settings; gradual fiscal consolidation would help close the estimated current account gap.
- Central bank reserves: Central bank reserves (excluding QIA assets) reported as 30.5 in 2018 and projected at 41.2 in 2020 (units as in source). Reserves in months of imports: 5.5 in 2018 and 6.9 in 2020.
- External debt: 101.1 percent of GDP in 2018 and projected 98.3 percent of GDP in 2020.
- Exports and imports (annual percent changes shown): Exports 84.5 in 2018 and 80.4 projected in 2020; Imports -33.2 in 2018 and -34.6 projected in 2020.
- Note: QIA assets estimated at about US$320 billion (166 percent of GDP and 345 percent of public debt).

### Financial sector stability and supervision
- Banking sector soundness: strong profitability, strong capital, and high asset quality; stress tests indicate banks can withstand severe macroeconomic shocks.
- Risks to monitor: softening of real estate prices (real estate prices fell by 8 percent on average in 2018); need to monitor banking sector assets closely.
- Policy recommendations:
  - QCB to consider introducing additional indicators such as vacancy rates to assess real estate developments.
  - Continue emphasis on risk-based supervision to detect vulnerabilities earlier.
  - Enforce loan-to-deposit ratio to encourage banks to reduce leverage.
  - Strengthen modalities for exchange of information between fiscal and monetary authorities to avert sharp liquidity swings.
  - Strengthen financial supervision and regulatory framework to manage risks from financial innovation and protect consumers.
  - Enhance liquidity forecasting through robust information exchange between fiscal and monetary authorities.

### Structural reforms and diversification
- Reform agenda: focus on private sector-led growth and economic diversification; measures include business environment improvements, special economic zones (SEZs), labor law reforms, increased foreign ownership limits, and privatization.
- Guidance on SEZs: SEZs can be helpful short term but should not replace economy-wide structural reforms.
- Business environment priorities:
  - Improve contract enforcement.
  - Strengthen competition via insolvency reform.
  - Use domestic and export-market competition as benchmarks to hold government-supported beneficiaries accountable.
- Labor and inclusion policies:
  - Education and labor market measures to complement public-sector employment reform.
  - Laws ensuring equal remuneration and supporting gender equality would support inclusive growth.

### Selected economic and financial indicators (2015–2020) — key series preserved from source table
- Real GDP (2013 prices): 2015: 3.7; 2016: 2.1; 2017: 1.6; 2018: 2.2; 2019: 2.6; 2020: 3.2
- Hydrocarbon (real GDP contribution): 2015: -0.6; 2016: -0.9; 2017: -0.7; 2018: -1.1; 2019: 0.4; 2020: 1.8
- Nonhydrocarbon (real GDP contribution): 2015: 8.5; 2016: 5.3; 2017: 3.8; 2018: 5.3; 2019: 4.6; 2020: 4.3
- CPI inflation (average): 2015: 1.8; 2016: 2.7; 2017: 0.4; 2018: 0.2; 2019: 0.1; 2020: 3.7
- Total revenue (percent of GDP): 2015: 43.6; 2016: 30.9; 2017: 26.9; 2018: 31.7; 2019: 32.8; 2020: 31.7
- Expenditure (percent of GDP): 2015: 42.3; 2016: 40.1; 2017: 33.5; 2018: 29.4; 2019: 29.8; 2020: 28.3
  - Current: 2015: 28.5; 2016: 21.5; 2017: 18.6; 2018: 15.5; 2019: 17.1; 2020: 17.2
  - Capital: 2015: 13.8; 2016: 18.6; 2017: 14.8; 2018: 13.9; 2019: 12.6; 2020: 11.2
- Central government fiscal balance (percent of GDP): 2015: 1.3; 2016: -9.2; 2017: -6.6; 2018: 2.3; 2019: 3.0; 2020: 3.4
- Broad money (annual percent change): 2015: 3.4; 2016: -4.6; 2017: 21.3; 2018: -6.5; 2019: 4.3; 2020: 7.9
- Credit to private sector (annual percent change): 2015: 19.7; 2016: 6.5; 2017: 6.4; 2018: 13.0; 2019: 4.8; 2020: 9.0
- Exports (annual percent change): 2015: 77.3; 2016: 57.3; 2017: 67.5; 2018: 84.5; 2019: 80.2; 2020: 80.4
- Imports (annual percent change): 2015: -28.5; 2016: -31.9; 2017: -30.8; 2018: -33.2; 2019: -33.9; 2020: -34.6
- Current account balance (US$ billions): 2015: 13.8; 2016: -8.3; 2017: 6.4; 2018: 18.0; 2019: 8.9; 2020: 8.4
- Current account balance (percent of GDP): 2015: 8.5; 2016: -5.5; 2017: 3.8; 2018: 9.3; 2019: 4.6; 2020: 4.1
- External debt (percent GDP): 2015: 88.4; 2016: 127.2; 2017: 99.6; 2018: 101.1; 2019: 106.7; 2020: 98.3
- Central bank reserves 2/ (US$ billions): 2015: 37.2; 2016: 31.7; 2017: 14.9; 2018: 30.5; 2019: 44.3; 2020: 41.2
- Central bank reserves (months of imports): 2015: 7.0; 2016: 6.1; 2017: 2.7; 2018: 5.5; 2019: 7.7; 2020: 6.9
- Exchange rate (Riyals/US$): 2015–2020: 3.6 (each year)
- Real effective exchange rate (percentage change): 2015: 11.0; 2016: 2.6; 2017: -1.1; 2018: -3.7; 2019: ...; 2020: ...

### Executive Board and staff assessment — key messages
- The fixed exchange rate regime remains appropriate and provides a clear and credible monetary anchor.
- Qatar is well placed to weather hydrocarbon price shocks given significant buffers and prudent policies.
- Gradual fiscal consolidation is appropriate to generate sufficient savings for future generations.
- Strengthening fiscal policy frameworks, improving transparency, and advancing structural reforms will support sustained, inclusive, private sector-led growth.

*Source: IMF staff report for the 2019 Article IV consultation (QATAR: STAFF REPORT FOR THE 2019 ARTICLE IV CONSULTATION).*

### 7.      Liquidity conditions have improved, and the growth of private-sector credit has

### 1qatea2019001 - 7.      Liquidity conditions have improved, and the growth of private-sector credit has

### Liquidity and private-sector credit
- Qatar Central Bank’s (QCB) monetary policy broadly followed increases in the U.S. Federal Reserve rate, appropriate given the pegged exchange rate to the U.S. dollar and robust non-oil GDP growth.
- Recovery in non-resident deposits and foreign bank funding supported credit expansion:
  - Non-resident deposits: recovery by 23 percent y-o-y by December 2018.
  - Foreign bank funding: up by 23 percent.
  - Private-sector credit: increased by 13 percent y-o-y by December 2018.
- Banks diversified the geographical composition of non-resident deposits and lengthened their maturity structure.

### Banking sector health and market conditions
- Key banking-sector metrics (at end-September 2018):
  - Capital adequacy ratio (CAR): 16 percent.
  - Return on assets (ROA): 1.6 percent.
  - Non-performing loans (NPL) ratio: 1.7 percent.
  - Provisioning ratio: 83 percent.
  - Liquid-asset-to-total-asset ratio: 29.7 percent.
- System-wide loan-to-deposit (LTD) ratio: 103 percent (slightly exceeds QCB’s guidance of 100 percent), driven by credit growth outpacing deposits.
- Financial markets in 2018:
  - Stock market index rose by 23 percent in 2018 (recovering 2017 losses).
  - Bond yields declined, reflecting positive investor sentiment.

### Macro-financial prospects and projections
- Growth:
  - GDP growth projected at 2.6 percent in 2019 (from 2.2 percent in 2018).
  - Non-hydrocarbon growth projected to moderate from 5.3 percent in 2018 to 4.6 percent in 2019.
  - Medium-term non-oil growth expected to moderate to 4 percent annually as public investment growth tapers.
  - Medium-term support: increased gas production from the Barzan project and planned increase in LNG production capacity by 40 percent.
- Inflation:
  - Projected to peak at 3.7 percent in 2020 with the introduction of a VAT, converging to 2 percent in the medium term.
- Fiscal:
  - Fiscal position to improve to about 3 percent in 2019 (from 2.3 percent in 2018) due to expenditure restraint and lagged revenue from higher oil prices.
  - Over the medium term, fiscal position expected to be in moderate surplus given broadly stable hydrocarbon prices and sustained expenditure control.
- Current account:
  - Surplus of about 4.6 percent of GDP projected for 2019.
  - Moderate surpluses expected over the medium term.
- Credit growth:
  - Ample liquidity—partly reflecting relatively higher oil prices—should enable credit growth to support non-hydrocarbon GDP.

### Downside risks and low oil-price scenario
- Main risk: lower-than-projected hydrocarbon prices.
- Vulnerabilities: dependence on the hydrocarbon sector, open capital account, pegged exchange rate, susceptibility to global financial market volatility and trade disruptions.
- Scenario particulars and implications:
  - A scenario with oil prices lower by about US$10 a barrel compared to the baseline would deteriorate external and fiscal positions and raise public debt.
  - One-standard deviation shocks (market-based options prices as of February 2019) indicate oil prices of US$37 per barrel compared to US$51 in the alternative scenario.
  - Macro-financial linkages could amplify impacts via tighter liquidity, increased NPLs, and weaker credit growth, adversely affecting the non-hydrocarbon sector.
- Policy guidance in such circumstances:
  - Gradual fiscal adjustment recommended to smooth the transition.
  - Deployment of government financial assets likely to contain adverse economic implications.
  - A comprehensive asset/liability management framework should guide borrowing and investment choices, with attention to macro-financial implications and debt sustainability.
  - Enhanced transparency about QIA assets would support market confidence.

### Fiscal framework, intergenerational equity, and public finances
- 2019 budget stance:
  - Total expenditure growth limited to about 2 percent, while increasing allocations to critical sectors (health and education).
  - Excise taxes introduced: 100 percent on tobacco, 50 percent on all carbonated drinks, and 100 percent on all energy drinks.
  - VAT introduction postponed to 2020.
- Medium-term fiscal strategy:
  - Focus on sustaining gradual fiscal consolidation by containing the growth of the public wage bill and reducing public investment as projects wind down (including 2022 World Cup spending).
  - Nonhydrocarbon balance in line with intergenerational equity recommended as the appropriate fiscal anchor.
  - Estimated gap in 2018 between the nonhydrocarbon primary balance implied by intergenerational framework and the actual: about 5 percentage points of non-hydrocarbon GDP.
  - Public debt expected to fall to about 29 percent in the medium term; gross financing needs remain manageable.
- Structural and administrative reforms:
  - Design and implement public-sector employment reform emphasizing tighter eligibility for benefits and staffing reductions by attrition.
  - Complement public-sector employment reform with education and labor market reforms.
  - Accelerate reduction of utility subsidies and align prices to market/cost recovery levels to create incentives to reduce energy intensity—combined with strengthened social protection.
  - Establish an independent tax authority under the Ministry of Finance to improve tax administration.
  - Introduce a medium-term budget framework (MTBF) and move towards a performance-based medium-term expenditure framework (MTEF).
  - Improve coordination among fiscal authorities, QIA, and QCB to strengthen fiscal-macroeconomic management and liquidity management.
  - Publish comprehensive budget information, regular budget execution data, and composition of QIA’s assets; adopt GFSM 2001 and GFSM 2014 for expanded coverage and effective budget monitoring.
- Additional fiscal facts and estimates:
  - Public to private wage gap in Qatar estimated at about 171 percent.
  - Removal of subsidies on electricity and gas would yield additional revenue of about 4 percent of non-hydrocarbon GDP (price-gap approach estimate).

### Authorities’ views
- Authorities broadly shared staff’s assessment of macro-financial prospects and risks.
- They emphasized:
  - Potential for higher growth if investments to raise hydrocarbon production deliver larger spillovers to non-hydrocarbon output.
  - Annual budget premised on conservative oil price assumptions to delink government expenditure from volatile revenues.
  - Expectation of further accumulation of international reserves reflecting continued fiscal and external surpluses.
  - Confidence that ample fiscal and external buffers can address potential macroeconomic and financial implications of lower hydrocarbon prices and other downside risks.

*Sources: Country authorities; and IMF staff calculations.*

### 17.      Staff and the authorities agreed on the importance of strengthening the regulatory

### 1qatea2019001 - 17.      Staff and the authorities agreed on the importance of strengthening the regulatory

### Regulatory and supervisory framework
- Banks in Qatar are now IFRS9 compliant; the overall impact on banks’ capital adequacy has been limited.
- The Financial Stability and Risk Control Committee is fully operational and has been meeting regularly to assess financial stability and inter-regulatory co-ordination.
- Bank supervision is increasingly conducted on a risk-based approach with thematic inspections based on continuous monitoring of banks’ financials.
- Authorities are strengthening early warning frameworks by introducing new indicators such as the vacancy rate.

### Banking sector performance and real estate exposure
- The banking sector is adjusting to the decline in real estate prices by reducing credit allocation to contractors and the real estate sector.
- Staff recommended developing additional indicators (for example, vacancy rates) to assess emerging trends in the real estate sector in a more timely manner.
- Emphasis on ensuring adequate provisioning and early risk recognition by banks, particularly those with higher exposure to the real estate sector.
- QCB is paying close attention to banks’ real estate exposure and is developing additional metrics to supplement its existing index.

Box 2 (property market update) — key data and trends:
- Real estate prices: following an 82 percent increase during 2012–16, real estate prices fell by 15 percent during 2017–18 (QCB real estate price index).
- Transactions: both the volume and number of transactions are down since the 2013–2014 peak.
- Land vs residence prices: land prices rebounded in 2017 before adjusting in 2018; residence prices have been on a declining trend since mid-2014, with indications that the slowdown is flattening.
- Regional patterns: land prices in Al Daayen held up better (linked to Lusail City and 2022 World Cup projects); land prices in Al Wakra remained stable due to major infrastructural projects.

### Liquidity management and inter-agency coordination
- Changes in the funding environment—uncertain oil price, geopolitical risks, and volatility of external flows—suggest a need for an enhanced liquidity management framework.
- QCB has developed an analytical framework to guide liquidity forecasting and implementation.
- Staff emphasized improving the exchange of information between the central government, QCB, and QIA to avoid marked swings in liquidity and potential adverse macro-financial implications.
- QCB noted the exchange of information from fiscal authorities on liquidity flows to the banking system.

### Financial markets deepening, inclusion, and Fintech
- Authorities are implementing the Second Strategic Plan for the financial sector with a focus on deepening domestic financial markets to promote savings, borrowing and investment opportunities, and greater financial inclusion, particularly for women and small and medium enterprises (SMEs).
- SME lending remains very low in Qatar at around 2 percent of total credit.
- Fintech is identified as a tool to increase financial inclusion (including lending to SMEs), but introduces risks to data privacy and cybersecurity.
- Staff supported authorities’ approach of initial testing of Fintech within a sandbox environment and in cooperation with international regulators, while emphasizing consumer protection and soundness of products.

### AML/CFT framework
- Draft amendments to the AML/CFT law and the mechanism to implement United Nations Security Council Resolutions related to terrorist and proliferation financing are being considered.
- Reforms should be expedited and implemented in line with FATF standards.
- QCB uses its own tools for assessing ML/TF risks of institutions and sectors; further progress is required to understand risks of individual institutions and to conduct fully risk-based AML/CFT supervision.
- QCB is prioritizing institutions for AML/CFT supervision based on results from risk assessment tools.

### Structural reform, diversification, and inclusivity
- Authorities advance a broad agenda to diversify the economy, including improvements in contract enforcement, customs procedures, labor law reforms, increased foreign ownership limits, and privatization.
- Special Economic Zones (SEZs) are planned to develop local supply chains and catalyze logistics, downstream chemicals, and emerging technology; staff cautioned SEZs should not replace economy-wide structural reforms.
- Staff recommended a comprehensive investment attraction strategy that ensures access to finance, integrates innovative foreign ventures, is well communicated, and invests in targeted human capital.
- Domestic and export-market competition should be used to hold beneficiaries of government support accountable; authorities agreed on the importance of setting performance benchmarks.
- Gender equality: World Economic Forum indicates a larger gender gap in economic participation than emerging markets on average; introducing and enacting laws on equal remuneration and encouraging gender equality were recommended.

Box 3 — policies to drive diversification (summary of priorities):
- Diversification is important to manage temporary shocks and long-term demand risks to hydrocarbons.
- QIA’s asset allocation strategy should consider Qatar’s dependence on hydrocarbons and the trade-off between domestic investment and financial accumulation.
- Priority sectors in the Second National Development Strategy: manufacturing, finance, professional and scientific activities, tourism, logistics, and information and communication.
- Recommendations: focus on opportunities linked to current strengths, present cost-benefit analysis for proposed investments and incentives, build expertise in specific clusters, attract foreign investment and skilled workers, sequence policies, and preserve competition by supporting sectors rather than specific firms.

### Macroeconomic policy assessment and staff appraisal
- Qatar has adjusted to dual shocks of lower oil prices and diplomatic rift, underpinned by prudent fiscal policy, an appropriate monetary anchor, sound financial regulation and supervision frameworks, and considerable buffers.
- Increased gas production, a slower pace of fiscal consolidation, infrastructure programs and adequate credit growth will underpin growth over the medium term.
- The fixed exchange rate regime remains appropriate; the external position is weaker than implied by fundamentals and desired policy settings.
- Fiscal consolidation over the medium term would help close the estimated current account gap.
- Main risk: lower-than-envisaged hydrocarbon prices; Qatar is judged able to weather such a shock given significant buffers and prudent policies.

Key staff recommendations:
- Pursue gradual fiscal consolidation to achieve adequate savings for future generations.
- Enhance non-hydrocarbon revenues, including continuing work on the introduction of a VAT.
- Contain growth of the wage bill and put public investment on a downward path.
- Accelerate reduction of utility subsidies combined with strengthened social protection.
- Strengthen fiscal policy frameworks to avert procyclicality and ensure intergenerational equity; improve coordination among fiscal authorities, QCB and QIA.
- Accelerate adoption of a performance-based medium-term expenditure framework and publish comprehensive budget information including fiscal risks, budget execution data, and composition of QIA’s assets.
- Closely monitor banking sector assets given softening real estate prices; consider introducing additional indicators such as vacancy rates.
- Enforce the loan-to-deposit ratio to encourage banks to reduce leverage.
- Further strengthen financial supervision and the regulatory framework to manage risks from financial innovation while ensuring consumer protection.
- Continue structural reforms to support private sector-led growth, including improving contract enforcement, enhancing competition through insolvency reform, and addressing gender equality in remuneration.

*Italic: Source — IMF staff and Qatari authorities as presented in the provided content unit.*

### 31.      It is recommended that the next Article IV consultation take place on the standard

### 1qatea2019001 - 31.      It is recommended that the next Article IV consultation take place on the standard 12-month cycle.  

### Real sector developments
- GDP growth (Real GDP, 2013 prices):  
  - 2014: 4.0  
  - 2015: 3.7  
  - 2016: 2.1  
  - 2017: 1.6  
  - 2018 (est.): 2.2  
  - 2019 (proj.): 2.6  
  - 2020 (proj.): 3.2  
  - 2021 (proj.): 3.3  
  - 2022 (proj.): 2.7  
  - 2023 (proj.): 2.3  
  - 2024 (proj.): 3.0
- Hydrocarbon vs nonhydrocarbon contributions to growth: nonhydrocarbon growth recovers more strongly (Nonhydrocarbon growth series: 2014: 9.8; 2015: 8.5; 2016: 5.3; 2017: 3.8; 2018 (est.): 5.3; projected steady positive contributions through 2024).
- CPI inflation (average):  
  - 2014: 3.4  
  - 2015: 1.8  
  - 2016: 2.7  
  - 2017: 0.4  
  - 2018: 0.2  
  - 2019 (proj.): 0.1  
  - 2020 (proj.): 3.7  
  - 2021 (proj.): 2.3  
  - 2022 (proj.): 2.0  
  - 2023 (proj.): 2.0  
  - 2024 (proj.): 2.0
- Real per capita growth: negative in 2014–2016, modestly positive thereafter (2019 proj.: 1.4; 2020 proj.: 2.9; 2021 proj.: 3.1).

### Fiscal developments and public finances
- Central government finances (percent of GDP):  
  - Revenue: 2014: 45.7; 2015: 43.6; 2016: 30.9; 2017: 26.9; 2018: 31.7; 2019 (proj.): 32.8; 2020 (proj.): 31.7; 2021 (proj.): 30.8; 2022 (proj.): 29.9; 2023 (proj.): 29.1; 2024 (proj.): 28.4  
  - Expenditure: 2014: 33.4; 2015: 42.3; 2016: 40.1; 2017: 33.5; 2018: 29.4; 2019 (proj.): 29.8; 2020 (proj.): 28.3; 2021 (proj.): 27.7; 2022 (proj.): 26.5; 2023 (proj.): 26.1; 2024 (proj.): 25.3  
  - Central government fiscal balance (percent of GDP): 2014: 12.3; 2015: 1.3; 2016: -9.2; 2017: -6.6; 2018: 2.3; 2019 (proj.): 3.0; 2020 (proj.): 3.4; 2021 (proj.): 3.2; 2022 (proj.): 3.4; 2023 (proj.): 3.0; 2024 (proj.): 3.1
- Composition of expenditure (percent of GDP, selected): Current expenditure 2018: 15.5; Capital expenditure 2018: 13.9. Compensation of employees (percent of GDP): 2018: 5.2 (Table 3a shows Compensation of employees in levels and Table 3b shows percent-of-GDP series).
- Central government debt, gross (percent of GDP): 2014: 24.9; 2015: 35.5; 2016: 46.7; 2017: 49.8; 2018 (est.): 48.4; 2019 (proj.): 52.7; 2020 (proj.): 45.9; 2021 (proj.): 40.6; 2022 (proj.): 37.1; 2023 (proj.): 33.3; 2024 (proj.): 29.4
- Adjusted non-hydrocarbon primary balance (percent of non-hydrocarbon GDP): 2014: -57.8; 2015: -57.4; 2016: -45.4; 2017: -37.9; 2018: -35.4; projected improvement but still deeply negative through 2024 (2019 proj.: -34.2; 2024 proj.: -25.4).

### External sector developments
- Exports (billions of U.S. dollars): 2014: 126.7; 2015: 77.3; 2016: 57.3; 2017: 67.5; 2018: 84.5; 2019 (proj.): 80.2; 2020 (proj.): 80.4; 2021 (proj.): 80.6; 2022 (proj.): 82.1; 2023 (proj.): 83.2; 2024 (proj.): 86.4
- Imports (billions of U.S. dollars): 2014: -31.1; 2015: -28.5; 2016: -31.9; 2017: -30.8; 2018: -33.2; 2019 (proj.): -33.9; 2020 (proj.): -34.6; 2021 (proj.): -35.7; 2022 (proj.): -38.4; 2023 (proj.): -36.9; 2024 (proj.): -37.1
- Current account balance (billions of U.S. dollars and percent of GDP): 2014: 49.4 (24.0 percent of GDP); 2015: 13.8 (8.5 percent); 2016: -8.3 (-5.5 percent); 2017: 6.4 (3.8 percent); 2018: 18.0 (9.3 percent); 2019 (proj.): 8.9 (4.6 percent); 2020 (proj.): 8.4 (4.1 percent); 2021 (proj.): 6.9 (3.2 percent); 2022 (proj.): 8.8 (3.9 percent); 2023 (proj.): 5.7 (2.4 percent); 2024 (proj.): 7.8 (3.1 percent)
- Trade composition highlights: Hydrocarbon exports dominate (Hydrocarbon exports, 2018: 72.1 billion U.S. dollars of total 84.5); Non-hydrocarbon exports were 12.4 billion U.S. dollars in 2018 and show modest growth.
- External debt (percent of GDP): 2014: 56.2; 2015: 88.4; 2016: 127.2; 2017: 99.6; 2018: 101.1; 2019 (proj.): 106.7; projected decline through 2024 (2024 proj.: 76.6).
- Official reserves (excluding QIA assets, billions of U.S. dollars): 2014: 43.1; 2015: 37.2; 2016: 31.7; 2017: 14.9; 2018: 30.5; 2019 (proj.): 44.3; 2024 (proj.): 45.5
- Real effective exchange rate: depreciated over 2018 in line with the U.S. dollar (series shows negative change in 2018: -3.7 percent in Table 1 deflator/REER lines, with specific REER change 2018 listed as "...." in Table 4 but narrative notes depreciation).

### Financial sector and monetary developments
- Broad money (change in percent): 2014: 10.6; 2015: 3.4; 2016: -4.6; 2017: 21.3; 2018: -6.5; 2019 (proj.): 4.3; 2020 (proj.): 7.9; 2021 (proj.): 6.1; 2022 (proj.): 6.2; 2023 (proj.): 6.4; 2024 (proj.): 7.4
- Domestic credit to private sector (percent change): 2014: 20.3; 2015: 19.7; 2016: 6.5; 2017: 6.4; 2018: 13.0; 2019 (proj.): 4.8; 2020 (proj.): 9.0; 2021 (proj.): 7.0; 2022 (proj.): 6.5; 2023 (proj.): 6.4; 2024 (proj.): 7.5
- Bank liquidity and reserves: Commercial Bank Assets with Central Banks series shows CD Holdings and Excess Reserves trends; Reserve requirements and excess reserves rose in recent periods. Policy rates: Qatar 3-month T-bill rate (eop) 2018: 2.3 percent (Table 6 shows 3-month T-bill rate series 0.8, 1.5, 1.7, 2.3, 2.3).
- Financial soundness indicators (selected, percent):  
  - Regulatory Tier 1 capital to risk-weighted assets: 2014: 15.8; 2015: 15.2; 2016: 15.7; 2017: 16.1; 2018Q1: 14.9–15.1 (quarterly cells).  
  - Nonperforming loans to total loans: 2014: 1.7; 2015: 1.6; 2016: 1.3; 2017: 1.6; 2018Q1–Q3: 1.7.  
  - Return on assets: 2014: 2.1; 2015: 2.0; 2016: 1.7; 2017: 1.5; 2018Q1–Q3: 1.6.

### Labor market and inclusive growth indicators
- Population and employment structure: High population growth driven by expatriate workers, mainly into construction and non-government service sectors (Population distribution and Workers in paid employment series shown in Figures).
- Wages and employment: Average monthly wage and number of paid workers series show plateauing in 2014–2018 (Wages and Employment figure; Average monthly wage and paid workers series shown with levels in QR).
- Labor market statistics (selected):  
  - GDP per capita growth (2015–17 average): -4.3  
  - Unemployment rate (2017): 0.1 percent (national ILO estimate shown) with youth unemployment (ages 15–24, 2017): 0.4 percent; other regional comparators and indicators presented in Table 7.
- Education and human capital: Education expenditure (latest value available, percent of GDP): Qatar 3.6 (Figure compares GCC and OECD peers); TIMSS and years-of-schooling performance plotted showing room to improve education outcomes.

### Vulnerabilities and governance indicators
- Vulnerability indicators (Table 4, selected):  
  - Total debt (billion US$): 2014: 116.0; 2015: 142.9; 2016: 193.0; 2017: 166.3; 2018: 194.5  
  - Total debt (percent of GDP): 2014: 56.2; 2015: 88.4; 2016: 127.2; 2017: 99.6; 2018: 101.1  
  - Central bank net reserves (billion US$): 2014: 42.7; 2015: 36.9; 2016: 31.4; 2017: 14.5; 2018: 30.1; months of imports: 2018: 5.5 months  
  - External sector concentration: Hydrocarbon exports share of total exports: 2014: 89.9 percent; 2018: 85.4 percent
- Credit ratings and market indicators: Moody's long-term foreign currency rating: Aa2 (2014–2016), Aa3 (2017–2018); S&P: AA (2014–2016), AA- (2017–2018). Stock market index (end of period): notable decline in 2018 to 7714.3 (from highs above 12,285.8).

### Key projections and scenarios (from tables)
- Growth outlook (Table 1): Real GDP projected to pick up from 2.2 percent (2018 est.) to 2.6 percent (2019 proj.) and 3.2 percent (2020 proj.), with continued nonhydrocarbon-led expansion and modest hydrocarbon sector recovery.  
- Fiscal outlook: Central government fiscal balance projected to remain in surplus from 2018 onward (2018: 2.3 percent of GDP; 2019 proj.: 3.0 percent; 2020 proj.: 3.4 percent) while adjusted nonhydrocarbon primary balances remain deeply negative through 2024.  
- External and reserves: Official reserves rebound in projections (2019 proj.: 44.3 billion U.S. dollars; 2024 proj.: 45.5 billion U.S. dollars) while external debt ratios are projected to decline after 2019.

*Source: IMF staff report material, Qatar: Selected Figures and Tables (published material provided in content unit).*

### Annex I. Status of Staff Recommendations

### Annex I. Status of Staff Recommendations

### Fiscal policy and consolidation
- Continue gradual fiscal consolidation: Expenditure restraint continued in 2018, with a budget surplus.

### Tax reform
- Introduce excises and VAT: Excise taxes were introduced in 2019. The VAT is expected to be introduced in 2020.

### Public sector wages and workforce
- Contain public wage bill: Wage expenditure as a ratio of GDP continued on a declining path. The planned study on a comprehensive assessment of public sector work force requirements has commenced.

### Energy subsidies
- Further reform energy subsidies: Utility companies continue to focus on cost recovery.

### Public financial management
- Enhance public financial management framework, including putting in place a medium term budget framework: A new department has been created in the Ministry of Finance to help align the budgetary framework with the national development strategy. Key performance indicators are being used to guide budget design and implementation.

### Liquidity management
- Develop a liquidity forecasting framework: QCB has developed an analytical framework to underpin liquidity management. Efforts will be geared towards strengthening existing infrastructure for the exchange of information.

### Financial sector surveillance and regulation
- Strengthen financial sector surveillance: Banks are now IFRS9 compliant. The Financial Stability and Risk Control Committee is fully operational. There has been an increasing shift to risk-based supervision.

### Domestic financial markets and fintech
- Deepen domestic financial markets: The implementation of Second Strategic Plan for the financial sector focuses on the use of Fintech to achieve financial inclusion, particularly for SMEs.

### AML/CFT
- Further strengthen AML/CFT: Authorities continue to exert efforts to upgrade the AML/CFT framework, including the AML/CFT law.

### Business environment and investment
- Improve business environment: A visa-free entry program covering 80 nationalities has been implemented. Restrictions on foreign investment in many sectors have been lifted.

### Labor market, education, and residency reforms
- Continue labor market, education, and gender equality reforms: Most expatriate workers no longer need exit visas. Permanent residency is on offer to expatriates.

### Macroeconomic statistics
- Further improve macroeconomic statistics: The timeliness of the quarterly investment survey has improved and initiatives to further improve the quality of national accounts data are ongoing.

*Source: Annex I. Status of Staff Recommendations (IMF).*

### Annex V. Public-Sector Debt Sustainability Analysis

### Annex V. Public-Sector Debt Sustainability Analysis

### Baseline DSA — Key projections and indicators
- Nominal gross public debt (percent of GDP):
  - 2016: 26.5
  - 2017: 46.7
  - 2018: 49.8
  - 2019: 48.4
  - 2020: 52.7
  - 2021: 45.9
  - 2022: 40.6
  - 2023: 37.1
  - 2023 (repeated column): 33.3
- Public gross financing needs (percent of GDP):
  - 2016: -6.3
  - 2017: 11.4
  - 2018: 7.8
  - 2019: 3.4
  - 2020: 0.2
  - 2021: 2.5
  - 2022: 4.3
  - 2023: -0.4
  - 2023 (repeated column): 1.6
- Real GDP growth (percent):
  - 2016: 10.7
  - 2017: 2.1
  - 2018: 1.6
  - 2019: 2.2
  - 2020: 2.6
  - 2021: 3.2
  - 2022: 3.3
  - 2023: 2.7
  - 2023 (repeated column): 2.3
- Inflation (GDP deflator, percent):
  - 2016: 2.2
  - 2017: -8.1
  - 2018: 8.3
  - 2019: 12.8
  - 2020: -2.0
  - 2021: 2.2
  - 2022: 1.1
  - 2023: 2.1
  - 2023 (repeated column): 2.4
- Nominal GDP growth (percent):
  - 2016: 13.6
  - 2017: -6.2
  - 2018: 10.0
  - 2019: 15.3
  - 2020: 0.5
  - 2021: 5.4
  - 2022: 4.5
  - 2023: 4.8
  - 2023 (repeated column): 4.8
- Effective interest rate (percent): 5/  —  defined as interest payments divided by debt stock at end of previous year:
  - 2016: 5.7
  - 2017: 3.9
  - 2018: 3.2
  - 2019: 3.2
  - 2020: 3.2
  - 2021: 3.1
  - 2022: 3.2
  - 2023: 3.2
  - 2023 (repeated column): 3.2
- Sovereign spreads (EMBIG basis points and 5Y CDS basis points):
  - EMBIG (bp): 151
  - 5Y CDS (bp): 84
- Ratings:
  - Moody's: Aa3
  - S&P: AA-
  - Fitch: AA-

### Debt dynamics and contributions to changes in gross public sector debt
- Cumulative change in gross public sector debt:
  - 2016: 2.5
  - 2017: 11.2
  - 2018: 3.0
  - 2019: -1.4
  - 2020: 4.4
  - 2021: -6.8
  - 2022: -5.3
  - 2023: -3.5
  - 2023 (repeated column): -3.8
  - Cumulative (total): -16.5
- Identified debt-creating flows (cumulative):
  - 2016: -11.2
  - 2017: 11.5
  - 2018: 2.3
  - 2019: -8.9
  - 2020: -3.3
  - 2021: -6.2
  - 2022: -5.1
  - 2023: -5.3
  - 2023 (repeated column): -4.7
  - Cumulative (total): -33.4
- Primary deficit (percent of GDP; cumulative and levels):
  - Contribution to change in debt:
    - 2016: -10.3
    - 2017: 7.7
    - 2018: 5.2
    - 2019: -3.7
    - 2020: -4.6
    - 2021: -5.0
    - 2022: -4.6
    - 2023: -4.6
    - 2023 (repeated column): -4.2
    - Cumulative (total): -26.6
  - Primary (noninterest) revenue and grants (percent of GDP):
    - 2016: 40.1
    - 2017: 30.9
    - 2018: 26.9
    - 2019: 31.7
    - 2020: 32.8
    - 2021: 31.7
    - 2022: 30.8
    - 2023: 29.9
    - Cumulative (total): 186.1
  - Primary (noninterest) expenditure (percent of GDP):
    - 2016: 29.8
    - 2017: 38.7
    - 2018: 32.1
    - 2019: 28.0
    - 2020: 28.3
    - 2021: 26.7
    - 2022: 26.3
    - 2023: 25.2
    - Cumulative (total): 159.5
- Automatic debt dynamics (percent of GDP):
  - 2016: -0.9
  - 2017: 3.8
  - 2018: -2.9
  - 2019: -5.2
  - 2020: 1.3
  - 2021: -1.2
  - 2022: -0.6
  - 2023: -0.6
  - 2023 (repeated column): -0.5
  - Cumulative (total): -6.8
- Interest rate/growth differential (percent of GDP) — equals automatic debt dynamics in this table:
  - Same series as automatic debt dynamics (see above).
  - Of which: real interest rate contribution:
    - 2016: 1.0
    - 2017: 4.6
    - 2018: -2.2
    - 2019: -4.3
    - 2020: 2.5
    - 2021: 0.4
    - 2022: 0.9
    - 2023: 0.4
    - 2023 (repeated column): 0.3
    - Cumulative (total): 0.3
  - Of which: real GDP growth contribution:
    - 2016: -1.9
    - 2017: -0.8
    - 2018: -0.7
    - 2019: -0.9
    - 2020: -1.3
    - 2021: -1.6
    - 2022: -1.5
    - 2023: -1.0
    - 2023 (repeated column): -0.8
    - Cumulative (total): -7.1
- Exchange rate depreciation contribution: 0.0 for 2016–2018; dots thereafter (no contribution/projections).
- Other identified debt-creating flows, accumulation of deposits, contingent liabilities, pre-funding: all 0.0 for 2016–2023.
- Residual, including asset changes (percent of GDP):
  - 2016: 13.7
  - 2017: -0.4
  - 2018: 0.7
  - 2019: 7.5
  - 2020: 7.7
  - 2021: -0.7
  - 2022: -0.2
  - 2023: 1.8
  - 2023 (repeated column): 0.9
  - Cumulative (total): 17.0

### Alternative scenarios and underlying assumptions
- Baseline underlying assumptions (selected series in percent where shown):
  - Real GDP growth: 2018: 2.2; 2019: 2.6; 2020: 3.2; 2021: 3.3; 2022: 2.7; 2023: 2.3
  - Inflation: 2018: 12.8; 2019: -2.0; 2020: 2.2; 2021: 1.1; 2022: 2.1; 2023: 2.4
  - Primary Balance (percent of GDP): 2018: 3.7; 2019: 4.6; 2020: 5.0; 2021: 4.6; 2022: 4.6; 2023: 4.2
  - Effective interest rate: 2018: 3.2; 2019: 3.2; 2020: 3.1; 2021: 3.2; 2022: 3.2; 2023: 3.2
- Historical scenario (assumes historical high growth and fiscal balances persist):
  - Real GDP growth series for 2018–2023: 2.2, 8.2, 8.2, 8.2, 8.2, 8.2
  - Primary Balance for 2018–2023: 3.7, 7.0, 7.0, 7.0, 7.0, 7.0
  - Effective interest rate 2018–2023: 3.2, 3.1, 3.0, 3.0, 3.1, 3.1
- Constant Primary Balance scenario (primary balance stays at 3.7 percent of GDP from 2019 onward):
  - Primary Balance 2018–2023: 3.7, 3.7, 3.7, 3.7, 3.7, 3.7
  - Effective interest rate 2018–2023: 3.2, 3.1, 2.9, 2.9, 3.0, 2.9
- Scenario charts presented:
  - Composition of Public Debt (by maturity: medium and long-term vs short-term; by currency: local vs foreign) and Gross Nominal Public Debt trajectories for 2016–2023 under Baseline, Historical, and Constant Primary Balance scenarios.
- Note on projections: Footnote 9 assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.

### Composition of public debt and financing needs
- Public gross financing needs are charted as percent of GDP with historical and projected values for 2016–2023 (exact numeric series provided above).
- Composition by maturity and by currency are presented for 2007–2023 as percent of GDP (charts included in original): categories shown include short-term vs medium and long-term; local currency-denominated vs foreign currency-denominated.

### Technical definitions and formulae used in the DSA
- Effective interest rate defined as interest payments divided by debt stock (excluding guarantees) at the end of previous year.
- Automatic debt dynamics formula (footnote 5):
  - Derived as [(r - π(1+g) - g + ae(1+r)]/(1+g+π+gπ)) times previous period debt ratio, with r = interest rate; π = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
- Real interest rate contribution: numerator in footnote 5 as r - π (1+g); real growth contribution as -g.
- Exchange rate contribution: numerator in footnote 5 as ae(1+r).
- Residual includes asset changes and interest revenues (if any); for projections includes exchange rate changes during the projection period.

### Statistical issues and data adequacy for surveillance
- General assessment: Data provision has some shortcomings but is broadly adequate for surveillance; scope for improving data frequency, timeliness, and coverage.
- Key areas needing improvement:
  - Real GDP: quarterly estimates compiled based on limited source data; benchmarking procedures to annual estimates need improvements; Planning and Statistics Authority producing new supply and use tables.
  - Price statistics: monthly CPI with significant rent share; rent component has limited geographic coverage and only reflects new contracts; household income and expenditure survey 2012–13 underpins updated CPI basket (2013 base) introduced early 2015.
  - Real estate statistics: Ministry of Justice provides transaction-level data in Arabic PDFs; QCB produces aggregate residential real estate monthly price index published quarterly covering transactions between private parties; disaggregated indices unavailable; authorities working on housing vacancy measure.
  - Government Finance Statistics: Authorities implementing Government Financial Management Information System (GFMIS) to enable accrual fiscal accounts per GFSM 2001; currently GFSM 2001 figures estimated by staff from modified cash data; IMF STA mission planned April–May 2019.
  - Monetary statistics: QCB submits monetary and financial statistics based on Standardized Report Forms (SRFs); MFS published in International Financial Statistics timely; Qatar reports some Financial Access Survey indicators.
  - Financial Sector Surveillance: QCB does not report Financial Soundness Indicators to STA.
  - External Sector Statistics: QCB reports quarterly balance of payments data to STA on BPM5 basis; financial account coverage improved for major public corporations, Qatar Financial Center Authority, and Qatar Exchange; a quarterly nonfinancial sector survey launched August 2017 to support quarterly IIP compilation; QCB has not yet reported IIP data to STA; partial IIP data shared during Article IV consultations; Qatar does not participate in the Coordinated Direct Investment Survey yet.
  - External debt: Detailed medium and long-term external debt data provided to missions; Ministry of Finance debt office collating public and public enterprise debt; authorities publishing public external debt on QCB website.
- Data Standards and Quality:
  - Qatar is a GDDS participant since December 2005 but has not implemented e-GDDS due to lack of a National Summary Data Page.
  - SDDS assessment (2016) found eleven out of 15 data categories met SDDS requirements for coverage, periodicity, and timeliness; further efforts needed for SDDS subscription.

### Relations with the Fund and the World Bank — operational notes
- IMF relations (as of February 28, 2019):
  - Membership: Joined September 8, 1972; Article VIII on June 4, 1973.
  - Quota: SDR Million 735.10 (100.00 percent of quota)
  - Fund holdings of currency: 610.85 (83.10)
  - Reserve position in Fund: 124.25 (16.90)
  - SDR Department net cumulative allocation: 251.40 (100.00)
  - SDR holdings: 273.65 (108.85)
  - Outstanding Purchases and Loans: None
  - Projected payments to Fund (SDR million) — Principal and Charges/Interest for 2018–2022: all 0.00
  - Exchange rate arrangement: Qatari riyal pegged to U.S. dollar at QR 3.64 = US$1.00 since July 2001; accepted obligations under Article VIII, Sections 2, 3, and 4(a); maintains exchange restrictions for security reasons based on UN Security Council Resolutions notified under Executive Board Decision No. 144 (52/51).
  - Last Article IV consultation: discussions February 4–21, 2018; staff report considered May 18, 2018 and published May 30, 2018.
  - FSAP missions: conducted in 2007.
  - Technical assistance: numerous STA, LEG, FAD missions listed spanning April 2000–March 2018 (topics include Real Sector Statistics, Balance of Payments Statistics, Multisector Statistics, Government Finance Statistics, AML/CFT assessments, GDDS/SDDS assessments, National Accounts, etc.).
- World Bank cooperation (as of February 2019):
  - Cooperation began in 2003; activities include Public Transport Sector Reform study, Labor Market Strategy (2004), payment systems technical assistance, Knowledge Economy study (2007), advisory services framework (2011), assistance with National Development Strategy mid-term review and second NDS (2017–22), SME access to government contracts, early childhood education, national payment system modernization, macro-prudential stress testing tools for central bank, and business regulatory upgrades.
  - Ongoing dialogue for support on health and education public spending efficiency, health insurance design, water and electricity regulation, and further business regulation improvements.

*Source: IMF staff (Annex V. Public-Sector Debt Sustainability Analysis, as of December 28, 2018; Statistical Issues and institutional/relations sections as of March/February 2019).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2019/1qatea2019001.pdf_