IMF Staff Completes 2024 Article IV Mission to Qatar

IMF News, December 2, 2024

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IMF staff team led by Ms. Ran Bi visited Doha during November 10–21, 2024 to conduct discussions for the 2024 Article IV consultation.
The mission will submit a report to IMF management and Executive Board, which is scheduled to discuss the Article IV Consultation in January 2025.
Press Release No. 24/448.

Near-term real GDP growth is expected to reach 2 percent.
Real GDP growth declined from 4.2 percent in 2022 to 1.2 percent in 2023, mainly due to contracting construction activities and moderating services growth after the 2022 FIFA World Cup.
The 2024-25 real GDP growth is expected to reach 2 percent, supported by public investment, spillovers from the ongoing LNG expansion project, and strong tourism.
The medium-term outlook: average annual growth projected to be around 4¾ percent, benefitting from the significant LNG production expansion and NDS3 reform implementation.
Headline inflation is likely to ease to 1 percent in 2024 and gradually converge to 2 percent.
The fiscal and current accounts are projected to remain in surpluses over the medium term.
Risks to the outlook are broadly balanced.

Broad fiscal prudence and progress in strengthening fiscal institutions in recent years are commendable.
While some fiscal space was deployed to support the slowing economy in 2023, the fiscal stance remained consistent with the level that ensures intergenerational equity.
Continued fiscal discipline is expected for 2024, and broadly prudent spending plans are envisaged under the upcoming 2025 budget.
Commendable reforms: extension of the medium-term budget to cover five years and progress in implementing program-based budgeting.
Policy recommendations:
- Accelerate revenue diversification, especially to introduce a value-added tax.
- Enhance spending efficiency and gradually align domestic and export energy prices.
- Reorient public spending to facilitate private sector growth.
- Adopt a full-fledged medium-term fiscal framework with a fiscal anchor to ensure intergenerational equity, complemented by greater transparency and risk management.

The Qatar Central Bank (QCB) has broadly maintained monetary policy in line with the U.S. Federal Reserve, consistent with the currency peg to the U.S. dollar.
Progress in enhancing liquidity management is commendable; continued efforts are important to further strengthen the effectiveness of the monetary operational framework.
The banking sector remains healthy, supported by robust buffers, diligent QCB supervision and ample hydrocarbon liquidity.
Continued vigilance is important to:
- Manage banks’ net foreign liabilities (although their average maturity have lengthened and external funding sources have become more diversified).
- Address asset quality concerns in some banks.
- Monitor the interconnectedness between banks and the public sector.
Additional recommendations:
- Formalize the financial safety net to enhance predictability, efficiency, and confidence.
- Keep momentum in domestic financial market deepening, guided by the Third Financial Sector Strategy.
- Continue progress in fighting financial crimes.

Strong reform momentum following the launch of the Third National Development Strategy (NDS3) should continue to build a knowledge-based, private sector-led, and sustainable economy.
Key reform priorities:
- Build a highly skilled labor force and enhance human capital.
- Foster innovation, promote trade diversification, FDI and domestic knowledge spillovers.
- Further enhance business efficiency.
- Leverage AI adoption and broader digitalization while monitoring labor market impacts.
- Pursue a concerted effort among stakeholders to fulfill climate goals.
- Enhance data availability and quality to support reform implementation.
Success of NDS3 hinges on proper prioritization and enhanced inter-agency coordination in reform implementation.

The staff team expressed appreciation to the authorities for productive discussions and arrangements to facilitate the visit.
The team met with Minister of Finance H.E. Ali bin Ahmed Al Kuwari, other senior government officials, and private sector representatives.

Source: International Monetary Fund staff end-of-mission statement, December 2, 2024.