## IMF Staff Concludes Staff Visit with Qatar _IMF News, May 18, 2023_ ## Source details **Canonical URL:** [IMF Staff Concludes Staff Visit with Qatar](https://www.imf.org/en/news/articles/2023/05/18/pr23161-qatar-imf-staff-concludes-staff-visit) ## Other formats - [Markdown version](/en/news/articles/2023/05/18/pr23161-qatar-imf-staff-concludes-staff-visit/index.md) - [Structured JSON version](/en/news/articles/2023/05/18/pr23161-qatar-imf-staff-concludes-staff-visit/index.json) - [Bundle manifest](/en/news/articles/2023/05/18/pr23161-qatar-imf-staff-concludes-staff-visit/bundle-manifest.json) ## Bibliographic details - Published: May 18, 2023 --- ### Mission overview - An IMF team, led by Ms. Ran Bi, visited Doha during May 2–11, 2023 to gather facts on recent economic and financial sector developments, and the authorities’ policy actions and plans. - End-of-Mission press releases convey preliminary findings after a visit; the 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. - The team met with Minister of Finance H.E. Ali bin Ahmed al Kuwari, Governor of the Qatar Central Bank H.E. Sheikh Bandar Bin Mohammed Bin Saoud Al-Thani, other senior government officials, and private sector representatives. - The team looked forward to continuing the dialogue ahead of the 2023 Article IV Consultation. ### Economic performance and outlook - 2022: Very strong growth registered, boosted by hosting the 2022 FIFA World Cup. - Near-term outlook: Economy is expected to normalize in the near term while remaining robust. - Real GDP growth projections: - Expected at 2–2½ percent in 2023–24 on robust domestic demand and the ongoing LNG expansion. - Medium-term growth likely to rise to around 4–4½ percent after the North Field expansion starts boosting LNG production. - Inflation: Moderating gradually to around 3 percent. - Accounts: Fiscal and external current accounts are projected be in surpluses throughout the medium term. - External environment and opportunities: - Russian war in Ukraine highlighted risks and the role of natural gas in energy security, opening opportunities for Qatar. - Banking sector turmoil originating from the U.S. had only a limited and temporary impact on the domestic financial system. ### Fiscal position and public finances - Fiscal discipline and outcomes: - Fiscal surplus rose to around 10 percent of GDP in 2022, from close to zero in 2021. - Central government debt declined by 16 percentage points to around 42 percent of GDP during the same period. - 2023 budget: Continued discipline and sustaining domestic demand, with a broadly unchanged wage bill and cuts in public investment from 2022 outturns. - Medium-term budget: The upcoming medium-term budget for 2023–25 will be developed following the release of the 3rd National Development Strategy to balance aspiration for transformation and fiscal discipline. - Hydrocarbon windfalls: Most hydrocarbon windfalls in 2022 were saved; buoyant export revenue and public spending aid fiscal and external surpluses. ### Monetary policy and financial sector stability - Monetary policy stance: - The QCB has maintained price and financial stability. - Monetary policy has been tightened broadly following the U.S. Federal Reserve, consistent with the currency peg to the U.S. dollar. - Monetary policy transmission has strengthened through more effective liquidity management. - Banking sector soundness: - Banks remain well-capitalized, liquid and profitable. - Non-performing loans (NPLs) ratio has edged up amid monetary policy tightening; relatively high provisioning for NPLs mitigates the risk. - Banks’ reliance on non-resident deposits has progressively fallen by more than one-third (nearly US$30 billion) since their peak registered in late-2021. - Completion of World Cup-related projects and hydrocarbon windfalls have reduced credit demand from the public sector and provided additional liquidity to banks, reducing their funding needs. - Macroprudential measures: - The QCB implemented several macroprudential measures since the Spring of 2022 to discourage banks from relying on non-resident deposits, especially of short tenors. ### Structural reforms and development strategy - Diversification and development: - A decade of diversification efforts culminated in hosting the 2022 FIFA World Cup; the government is laying out its 3rd National Development Strategy to help achieve the ambitions of Qatar National Vision 2030. - The 3rd National Development Strategy is to be unveiled in the summer of 2023. - Green finance and ESG: - The Ministry of Finance has developed a Sovereign Green Financing Framework with a clear set of principles. - The QCB created a dedicated department to define ESG policies, standard reporting framework and management of ESG risk and compliance. - Related initiatives at the national level involving main regulatory bodies are being assessed. - Digitalization and fintech: - Qatar upgraded its digital infrastructure leveraging the 2022 FIFA World Cup. - The Investment Promotion Agency of Qatar embarked on partnerships to accelerate digital transformation and foster technological innovation domestically, including through FDI. - The QCB recently launched the National Fintech Strategy, with detailed guidelines and standards under development. ### Risks and scenarios - Downside risks: - Unfavorable global environment, including a sharper-than-expected global growth slowdown. - Tighter and more volatile global financial conditions. - Increased commodity price volatility. - Further worsening of geopolitical tensions. - Upside factors: - Accelerated reform efforts guided by the 3rd National Development Strategy could boost productivity and promote economic diversification. - Sustained high hydrocarbon prices would further strengthen the outlook. - Overall assessment: Risks to the outlook are broadly balanced. ### Policy implications and recommendations - Sustain fiscal discipline while balancing transformation ambitions through the medium-term budget for 2023–25 developed after the 3rd National Development Strategy. - Maintain prudent monetary policy consistent with the currency peg to the U.S. dollar and continue effective liquidity management to strengthen transmission. - Continue macroprudential measures to reduce banks’ reliance on non-resident deposits, especially short-tenor deposits. - Continue high provisioning for NPLs and monitor asset quality as monetary tightening progresses. - Advance structural reforms—including green financing, ESG frameworks, digitalization, and fintech—to support economic diversification, productivity, and inclusiveness aligned with Qatar National Vision 2030. *IMF Staff statement following a May 2–11, 2023 staff visit to Doha.* --- ## References - [Qatar and the IMF](http://www.imf.org/external/country/QAT/index.htm) - [Press Releases](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) _Source: https://www.imf.org/en/news/articles/2023/05/18/pr23161-qatar-imf-staff-concludes-staff-visit_