{
  "title": "Qatar: Staff Concluding Statement of the 2016 Article IV Mission",
  "publication": "IMF News, January 3, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/01/03/ms010317-qatar-staff-concluding-statement-of-the-2016-article-iv-mission",
  "canonical": "https://www.imf.org/en/news/articles/2017/01/03/ms010317-qatar-staff-concluding-statement-of-the-2016-article-iv-mission",
  "overlayPath": "/en/news/articles/2017/01/03/ms010317-qatar-staff-concluding-statement-of-the-2016-article-iv-mission/index.md",
  "summary": "Qatar is effectively adjusting to the new reality of sustained lower energy prices; authorities' policy response has been adequate, underpinned by cuts to current expenditures and renewed efforts towards increasing non-oil revenues.",
  "publishDate": "2017-01-03",
  "sections": [
    {
      "heading": "Context and outlook",
      "content": "- Qatar is effectively adjusting to the new reality of sustained lower energy prices; authorities' policy response has been adequate, underpinned by cuts to current expenditures and renewed efforts towards increasing non-oil revenues.\n- Utility tariff increases: water and electricity tariffs increased from October 2015; gasoline price increase in January 2016 followed by implementation of a regular price adjustment mechanism in May 2016.\n- Growth and inflation developments:\n  - Growth slowed to 1.7 percent (year-on-year) during the first half of 2016.\n  - Inflation reached 2.2 percent in October 2016 (year-on-year), in part due to higher domestic energy costs.\n- Fiscal and external position:\n  - Central government surplus fell from 12.3 percent of GDP in 2014 to 1.2 percent in 2015.\n  - Government debt ratio moved from 32.3 to 34.9 percent of GDP between 2014 and 2015.\n  - Qatar raised a total of US$ 14.5 billion of external debt and issued US$ 2.6 billion of domestic bonds and Sukuk.\n  - Current account surplus reduced from 24 percent in 2014 to 8.4 percent of GDP in 2015.\n- Banking sector: banks remain sound and well capitalized with a non-performing loan ratio of about 1.2 percent.\n- Baseline projections:\n  - Real GDP growth expected to moderate to about 2.7 percent in 2016 and projected to reach 3.4 percent in 2017.\n  - Expansion in the non-hydrocarbon sector driven by World Cup-related spending and added output from the new Barzan gas project.\n  - Average inflation in 2016 expected to inch up to 3 percent.\n  - During 2017–18, subsidy cuts, increased public fees, a moderate recovery in global commodity prices and implementation of a VAT will drive inflation, which is expected to moderate back to low levels over the medium term.\n  - Fiscal and external balances projected to persist in the near term, with medium-term improvements as hydrocarbon prices recover slightly and fiscal adjustment advances."
    },
    {
      "heading": "Main risks",
      "content": "- External risks:\n  - Possibility of persistently lower hydrocarbon prices relative to the baseline assumption.\n  - Prospects of further rises in US interest rates may complicate efforts to bolster economic growth.\n  - Spillovers to the non-oil sector via slower government spending and declining banking liquidity.\n- Domestic risks:\n  - Ongoing public investment program could cause near-term over-heating, potential resource misallocation, and reduced expenditure efficiency in the medium term.\n  - Financial sector risks: rising loan-to-deposit ratio possibly implying increased credit risk; some banks' expansion into riskier foreign jurisdictions could increase downside risks for asset quality.\n- Overall financial risk assessment: moderate, as banks’ balance sheets remain strong."
    },
    {
      "heading": "Policy recommendations and progress",
      "content": "- Fiscal consolidation sequencing:\n  - Pace and composition should balance revenue increases and expenditure restraint in the medium term.\n  - Contain the wage bill, public service benefits, subsidies, and goods and services expenditure while preserving growth-promoting public investment.\n  - Implement GCC agreement on VAT by 2018; Qatar is taking actions to ensure smooth and timely implementation.\n  - Implement excises on tobacco and sugary drinks starting in 2017 in line with GCC-wide agreement to yield additional revenue.\n  - Explore complementary revenue measures, including broadening the corporate income tax base to include GCC companies.\n  - Deficit financing should support private sector credit growth without jeopardizing external debt sustainability; financing mainly through external borrowing and asset drawdown seems appropriate given risk-return tradeoffs.\n- Public investment management:\n  - Good progress: new tender law and public finance law recently approved.\n  - Further efforts to enhance monitoring of public expenditures to improve efficiency and investment management.\n- Liquidity management:\n  - Increase transparency of T-bill auctions and improve communication on QCB liquidity operations to help banks anticipate liquidity conditions and strengthen liquidity management.\n- Exchange rate regime:\n  - Fixed peg to the U.S. dollar remains appropriate; should be periodically assessed over the medium term as the economy diversifies.\n- Financial market development:\n  - Deepen domestic financial markets to promote saving and provide long-term, lower-cost funding; Qatar has continued domestic debt market development and issued bonds and Sukuk in September 2016 (secondary trading remains very limited).\n- Banking supervision and macroprudential framework:\n  - Progress in implementing Basel III and related regulations, including liquidity ratios, counter-cyclical buffers, and buffers for systemically important domestic banks.\n  - Early Warning System is being developed; efforts to enhance AML/CFT framework are underway.\n  - Priority: further extend and strengthen early warning indicators to improve financial sector monitoring.\n- Competitiveness and labor market:\n  - Qatar’s competitiveness indicators are the strongest in the GCC region but there is scope for improvement versus non-GCC peers.\n  - Measures implemented: strengthen private sector, promote SMEs, incentivize nationals to work in non-government jobs, accelerate contract enforcement and simplify business registration.\n  - Labor law reform: new labor law abolishing the “Kafala” came into effect in December 2016, making it easier for workers to switch jobs and exit the country.\n- Statistics and transparency:\n  - Authorities started publishing quarterly GDP by expenditure and finalized the Foreign Investment Survey.\n  - Contemplating a new investment survey to address remaining gaps and improve IIP and BOP statistics.\n  - Progress on compiling fiscal data according to the GFSM 2001 and in subscribing to the SDDS."
    },
    {
      "heading": "Key macroeconomic indicators and selected figures (as presented)",
      "content": "- Nominal GDP (billions of Qatari Riyals): 2012: 680.1; 2013: 723.4; 2014: 750.7; 2015: 599.3; 2016 (Est.): 568.4; 2017 (Proj.): 624.7; 2018 (Proj.): 695.2; 2019 (Proj.): 738.9; 2020 (Proj.): 778.7; 2021 (Proj.): 818.1.\n- Nominal hydrocarbon GDP (billions of Qatari Riyals): 2012: 394.7; 2013: 403.0; 2014: 394.2; 2015: 231.3; 2016: 162.5; 2017: 190.4; 2018: 209.7; 2019: 212.1; 2020: 214.8; 2021: 218.0.\n- Nominal nonhydrocarbon GDP (share of overall GDP, percent): 2012: 42.0; 2013: 44.3; 2014: 47.5; 2015: 61.4; 2016: 71.4; 2017: 69.5; 2018: 69.8; 2019: 71.3; 2020: 72.4; 2021: 73.3.\n- Real GDP (2013 prices, change percent): 2012: 4.7; 2013: 4.4; 2014: 4.0; 2015: 3.6; 2016 (Est.): 2.7; 2017 (Proj.): 3.4; 2018 (Proj.): 2.8; 2019 (Proj.): 2.3; 2020 (Proj.): 2.0; 2021 (Proj.): 1.6.\n- CPI inflation (average): 2012: 3.1; 2013: 3.0; 2014: 2.6; 2015: 5.7; 2016 (Est.): 2.1.\n- Brent crude oil price (U.S. dollars per barrel): 2012: 112.0; 2013: 108.8; 2014: 98.9; 2015: 52.4; 2016 (Est.): 44.0; 2017 (Proj.): 53.5; 2018 (Proj.): 55.1; 2019 (Proj.): 55.5; 2020 (Proj.): 56.7; 2021 (Proj.): 58.0.\n- Crude oil production (thousands of barrels per day): 2012: 732.1; 2013: 697.8; 2014: 673.1; 2015: 636.4; 2016 (Est.): 651.2; 2017 (Proj.): 620.0; 2018 (Proj.): 583.6; 2019 (Proj.): 581.4; 2020 (Proj.): 563.8; 2021 (Proj.): 557.6.\n- Natural gas production (millions of tons per year): 2012: 90.8; 2013: 91.8; 2014: 91.3; 2015: 94.0; 2016 (Est.): 91.2; 2017 (Proj.): 94.5; 2018 (Proj.): 97.5; 2019 (Proj.): 98.5; 2020 (Proj.): 100.1.\n- Central government finances (percent GDP) — Revenue: 2012: 39.5; 2013: 47.6; 2014: 45.7; 2015: 42.7; 2016 (Est.): 25.4; 2017 (Proj.): 24.3; 2018 (Proj.): 24.0; 2019 (Proj.): 24.1; 2020 (Proj.): 23.5; 2021 (Proj.): 23.2.\n- Central government finances (percent GDP) — Expenditure: 2012: 31.0; 2013: 28.3; 2014: 33.4; 2015: 41.5; 2016 (Est.): 34.5; 2017 (Proj.): 32.6; 2018 (Proj.): 30.1; 2019 (Proj.): 28.5; 2020 (Proj.): 27.5; 2021 (Proj.): 26.5.\n- Central government fiscal balance (percent GDP): 2012: 8.6; 2013: 19.3; 2014: 12.3; 2015: -9.1; 2016 (Est.): -8.3; 2017 (Proj.): -6.1; 2018 (Proj.): -3.9; 2019 (Proj.): -3.3.\n- Central government debt, gross (percent GDP): 2012: 37.2; 2013: 33.1; 2014: 32.3; 2015: 34.9; 2016 (Est.): 47.8; 2017 (Proj.): 51.3; 2018 (Proj.): 53.2; 2019 (Proj.): 55.0; 2020 (Proj.): 57.2; 2021 (Proj.): 57.7.\n- Domestic credit to private sector (change percent): 2012: 13.5; 2013: 20.3; 2014: 19.7; 2015: 14.7; 2016 (Est.): 15.6; 2017 (Proj.): 14.0; 2018 (Proj.): 11.8; 2019 (Proj.): 10.8; 2020 (Proj.): 10.7.\n- Exports (billions of U.S. dollars): 2012: 133.0; 2013: 133.3; 2014: 126.7; 2015: 77.3; 2016 (Est.): 58.8; 2017 (Proj.): 67.4; 2018 (Proj.): 71.2; 2019 (Proj.): 72.0; 2020 (Proj.): 72.6; 2021 (Proj.): 73.6.\n- Imports (billions of U.S. dollars): 2012: -30.8; 2013: -31.5; 2014: -31.1; 2015: -28.5; 2016 (Est.): -29.2; 2017 (Proj.): -34.4; 2018 (Proj.): -36.0; 2019 (Proj.): -35.3; 2020 (Proj.): -35.1; 2021 (Proj.): -35.7.\n- Current account balance (billions of U.S. dollars): 2012: 62.0; 2013: 60.5; 2014: 49.4; 2015: 13.8; 2016 (Est.): -1.3; 2017 (Proj.): 3.7; 2018 (Proj.): 6.0.\n- Current account balance (in percent GDP): 2012: 33.2; 2013: 30.4.\n- External debt (percent GDP): 2012: 86.4; 2013: 81.4; 2014: 80.7; 2015: 110.6; 2016 (Est.): 132.8; 2017 (Proj.): 131.5; 2018 (Proj.): 126.0; 2019 (Proj.): 125.0; 2020 (Proj.): 124.8; 2021 (Proj.): 125.1.\n- Official reserves (billions U.S. dollars, excluding QIA assets): 2012: 42.2; 2013: 43.1; 2014: 33.3; 2015: 37.3; 2016 (Est.): 37.8; 2017 (Proj.): 38.3; 2018 (Proj.): 41.0.\n- Social indicators: Per capita GDP (2015): $68,940; Life expectancy at birth (2013): 78.4; Population (December 2015): 2.4 million.\n- Memorandum items: Credit rating (Moody's investor services): Aa2; Population growth (percent): 11.4; 9.3; 4.5; 0.0; Unemployment Rate (percent): 0.4.\n\nIMF staff concluding statement, January 3, 2017.\n\n---\n\n\n References\n\n- Kingdom of Bahrain and the IMF\n- Kuwait and the IMF\n- Qatar and the IMF\n- Saudi Arabia and the IMF\n- United Arab Emirates and the IMF\n- IMF Policy Advice -- A Factsheet\n- Mission Concluding Statements\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/01/03/ms010317-qatar-staff-concluding-statement-of-the-2016-article-iv-mission"
    }
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    "[Structured JSON version](/en/news/articles/2017/01/03/ms010317-qatar-staff-concluding-statement-of-the-2016-article-iv-mission/index.json)",
    "[Bundle manifest](/en/news/articles/2017/01/03/ms010317-qatar-staff-concluding-statement-of-the-2016-article-iv-mission/bundle-manifest.json)",
    "Published: January 3, 2017",
    "Qatar is effectively adjusting to the new reality of sustained lower energy prices; authorities' policy response has been adequate, underpinned by cuts to current expenditures and renewed efforts towards increasing non-oil revenues.",
    "Utility tariff increases: water and electricity tariffs increased from October 2015; gasoline price increase in January 2016 followed by implementation of a regular price adjustment mechanism in May 2016.",
    "Growth and inflation developments:",
    "Fiscal and external position:",
    "Banking sector: banks remain sound and well capitalized with a non-performing loan ratio of about 1.2 percent.",
    "Baseline projections:",
    "External risks:",
    "Domestic risks:",
    "Overall financial risk assessment: moderate, as banks’ balance sheets remain strong.",
    "Fiscal consolidation sequencing:",
    "Public investment management:",
    "Liquidity management:",
    "Exchange rate regime:",
    "Financial market development:",
    "Banking supervision and macroprudential framework:",
    "Competitiveness and labor market:",
    "Statistics and transparency:",
    "Nominal GDP (billions of Qatari Riyals): 2012: 680.1; 2013: 723.4; 2014: 750.7; 2015: 599.3; 2016 (Est.): 568.4; 2017 (Proj.): 624.7; 2018 (Proj.): 695.2; 2019 (Proj.): 738.9; 2020 (Proj.): 778.7; 2021 (Proj.): 818.1.",
    "Nominal hydrocarbon GDP (billions of Qatari Riyals): 2012: 394.7; 2013: 403.0; 2014: 394.2; 2015: 231.3; 2016: 162.5; 2017: 190.4; 2018: 209.7; 2019: 212.1; 2020: 214.8; 2021: 218.0.",
    "Nominal nonhydrocarbon GDP (share of overall GDP, percent): 2012: 42.0; 2013: 44.3; 2014: 47.5; 2015: 61.4; 2016: 71.4; 2017: 69.5; 2018: 69.8; 2019: 71.3; 2020: 72.4; 2021: 73.3.",
    "Real GDP (2013 prices, change percent): 2012: 4.7; 2013: 4.4; 2014: 4.0; 2015: 3.6; 2016 (Est.): 2.7; 2017 (Proj.): 3.4; 2018 (Proj.): 2.8; 2019 (Proj.): 2.3; 2020 (Proj.): 2.0; 2021 (Proj.): 1.6.",
    "CPI inflation (average): 2012: 3.1; 2013: 3.0; 2014: 2.6; 2015: 5.7; 2016 (Est.): 2.1.",
    "Brent crude oil price (U.S. dollars per barrel): 2012: 112.0; 2013: 108.8; 2014: 98.9; 2015: 52.4; 2016 (Est.): 44.0; 2017 (Proj.): 53.5; 2018 (Proj.): 55.1; 2019 (Proj.): 55.5; 2020 (Proj.): 56.7; 2021 (Proj.): 58.0.",
    "Crude oil production (thousands of barrels per day): 2012: 732.1; 2013: 697.8; 2014: 673.1; 2015: 636.4; 2016 (Est.): 651.2; 2017 (Proj.): 620.0; 2018 (Proj.): 583.6; 2019 (Proj.): 581.4; 2020 (Proj.): 563.8; 2021 (Proj.): 557.6.",
    "Natural gas production (millions of tons per year): 2012: 90.8; 2013: 91.8; 2014: 91.3; 2015: 94.0; 2016 (Est.): 91.2; 2017 (Proj.): 94.5; 2018 (Proj.): 97.5; 2019 (Proj.): 98.5; 2020 (Proj.): 100.1.",
    "Central government finances (percent GDP) — Revenue: 2012: 39.5; 2013: 47.6; 2014: 45.7; 2015: 42.7; 2016 (Est.): 25.4; 2017 (Proj.): 24.3; 2018 (Proj.): 24.0; 2019 (Proj.): 24.1; 2020 (Proj.): 23.5; 2021 (Proj.): 23.2.",
    "Central government finances (percent GDP) — Expenditure: 2012: 31.0; 2013: 28.3; 2014: 33.4; 2015: 41.5; 2016 (Est.): 34.5; 2017 (Proj.): 32.6; 2018 (Proj.): 30.1; 2019 (Proj.): 28.5; 2020 (Proj.): 27.5; 2021 (Proj.): 26.5.",
    "Central government fiscal balance (percent GDP): 2012: 8.6; 2013: 19.3; 2014: 12.3; 2015: -9.1; 2016 (Est.): -8.3; 2017 (Proj.): -6.1; 2018 (Proj.): -3.9; 2019 (Proj.): -3.3.",
    "Central government debt, gross (percent GDP): 2012: 37.2; 2013: 33.1; 2014: 32.3; 2015: 34.9; 2016 (Est.): 47.8; 2017 (Proj.): 51.3; 2018 (Proj.): 53.2; 2019 (Proj.): 55.0; 2020 (Proj.): 57.2; 2021 (Proj.): 57.7.",
    "Domestic credit to private sector (change percent): 2012: 13.5; 2013: 20.3; 2014: 19.7; 2015: 14.7; 2016 (Est.): 15.6; 2017 (Proj.): 14.0; 2018 (Proj.): 11.8; 2019 (Proj.): 10.8; 2020 (Proj.): 10.7.",
    "Exports (billions of U.S. dollars): 2012: 133.0; 2013: 133.3; 2014: 126.7; 2015: 77.3; 2016 (Est.): 58.8; 2017 (Proj.): 67.4; 2018 (Proj.): 71.2; 2019 (Proj.): 72.0; 2020 (Proj.): 72.6; 2021 (Proj.): 73.6.",
    "Imports (billions of U.S. dollars): 2012: -30.8; 2013: -31.5; 2014: -31.1; 2015: -28.5; 2016 (Est.): -29.2; 2017 (Proj.): -34.4; 2018 (Proj.): -36.0; 2019 (Proj.): -35.3; 2020 (Proj.): -35.1; 2021 (Proj.): -35.7.",
    "Current account balance (billions of U.S. dollars): 2012: 62.0; 2013: 60.5; 2014: 49.4; 2015: 13.8; 2016 (Est.): -1.3; 2017 (Proj.): 3.7; 2018 (Proj.): 6.0.",
    "Current account balance (in percent GDP): 2012: 33.2; 2013: 30.4.",
    "External debt (percent GDP): 2012: 86.4; 2013: 81.4; 2014: 80.7; 2015: 110.6; 2016 (Est.): 132.8; 2017 (Proj.): 131.5; 2018 (Proj.): 126.0; 2019 (Proj.): 125.0; 2020 (Proj.): 124.8; 2021 (Proj.): 125.1.",
    "Official reserves (billions U.S. dollars, excluding QIA assets): 2012: 42.2; 2013: 43.1; 2014: 33.3; 2015: 37.3; 2016 (Est.): 37.8; 2017 (Proj.): 38.3; 2018 (Proj.): 41.0.",
    "Social indicators: Per capita GDP (2015): $68,940; Life expectancy at birth (2013): 78.4; Population (December 2015): 2.4 million.",
    "Memorandum items: Credit rating (Moody's investor services): Aa2; Population growth (percent): 11.4; 9.3; 4.5; 0.0; Unemployment Rate (percent): 0.4.",
    "[Kingdom of Bahrain and the IMF](http://www.imf.org/external/country/BHR/index.htm)",
    "[Kuwait and the IMF](http://www.imf.org/external/country/KWT/index.htm)",
    "[Qatar and the IMF](http://www.imf.org/external/country/QAT/index.htm)",
    "[Saudi Arabia and the IMF](http://www.imf.org/external/country/SAU/index.htm)",
    "[United Arab Emirates and the IMF](http://www.imf.org/external/country/ARE/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Mission Concluding Statements](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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