IMF Staff Concludes Staff Visit with Qatar

IMF News, May 17, 2024

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IMF team led by Ms. Ran Bi visited Doha during April 30–May 09, 2024 to gather facts on recent economic and financial sector developments, the outlook and the authorities’ policy actions and plans.
End-of-Mission press release: Press Release No. 24/170 (May 17, 2024).
Views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

2023 real GDP growth estimated at 1.3 percent.
Growth profile:
- Likely to bottom out in the near term and gradually pick up to 1¾ percent in 2024–25.
- Medium-term average growth expected to reach around 4½ percent as North Field East and South projects complete and NDS3 implementation begins to bear fruit.
North Field West project will increase LNG production by another 20 percent by 2030, further improving the medium-term growth outlook.
Headline inflation expectations:
- Expected to ease to 2½ percent in 2024.
- Gradually converge to 2 percent over the medium term.
External and fiscal accounts expected to remain in surpluses over the medium term, assuming elevated hydrocarbon prices and sustained fiscal prudence.
Risk assessment: Risks to the outlook are broadly balanced.

2023 fiscal surplus is estimated at 5½ percent of GDP.
Non-hydrocarbon primary balance improved by more than 2 percentage points (ppts) of non-hydrocarbon GDP in 2023, indicating continued fiscal consolidation.
Central government debt is estimated to have fallen by 3 ppts to below 40 percent of GDP by end-2023.
2024 budget envisages further spending cuts from the 2023 outturn, driven by capital expenditure.
Medium-term budget (2024–26) updated to reflect financing for reform initiatives under NDS3.
Ongoing fiscal structural reforms include measures to improve the budgeting process, enhance spending efficiency and foster public-private partnership.

Monetary policy consistent with the currency peg to the U.S. dollar.
Qatar Central Bank (QCB) improvements:
- Improved liquidity management through carefully calibrated T-bill issuance, contributing to greater monetary policy transmission.
- Supported by IMF technical assistance, QCB is looking to further upgrade its liquidity management framework.
- Measures to reduce banks' short-term foreign asset-liability mismatches have encouraged longer-maturity domestic funding.
Banking sector indicators:
- Non-performing loans (NPLs) edged up to 3.8 percent in 2023Q2 (from 3.6 percent at end-2022) but are well provisioned.
- Liquidity coverage ratio at 174 percent in 2024Q1.
- Net stable funding ratio at 140 percent in 2024Q1.
- Banks remain well-capitalized, liquid and profitable.
Third Financial Sector Strategy launched to:
- Deepen financial markets.
- Promote savings.
- Offer greater borrowing and investment opportunities.
- Develop the insurance sector.
- Foster fintech.
- Achieve greater financial inclusion.

NDS3 launched in January 2024, covering 2024–30, provides a blueprint identifying strategic priorities and reforms to accelerate transformation toward Qatar National Vision 2030.
NDS3 emphasis: shift from a costly government-funded growth model to a more dynamic private sector-led model, with the state as an enabler; focus on diversification, productivity, competitiveness, and climate sustainability.
Specific initiatives and policy directions:
- New visa programs, flexible working hours, and re-skilling programs to attract talent and bolster a more dynamic labor market.
- Initiatives to foster innovation, support start-ups and encourage private sector participation.
- Qatar National Renewable Energy Strategy launched to invest in and utilize renewable energy.
- Digital Agenda 2030 released with ambitious targets and strategic priorities aligned with NDS3 goals.
- Establishment of the National Planning Council and the National Statistics Center to enhance strategic planning and monitoring and support more comprehensive data.
IMF readiness to support Qatar’s effort to upgrade macroeconomic and financial sector data collection and dissemination.

The launch of NDS3 and recent reform momentum are welcome and broadly in line with past IMF advice.
Continued prudence in macroeconomic and financial sector policies will further strengthen Qatar’s resilience amid elevated global uncertainty and geopolitical tensions.
Accelerated structural reforms, guided by NDS3, are needed to unleash Qatar’s growth potential and enhance climate sustainability.
The IMF team expressed appreciation for open and productive discussions with authorities, including meetings with Minister of Finance H.E. Ali bin Ahmed Al Kuwari and other senior officials and private sector representatives.
The IMF looks forward to continuing the dialogue ahead of the 2024 Article IV Consultation.

IMF Staff Concludes Staff Visit with Qatar, Press Release No. 24/170 (May 17, 2024).