The country’s growth is expected to accelerate to 2.6% this year from 1.6% in 2018, Kuwait-based banking major NBK said in a recent macroeconomic outlook

Qatar’s non-oil activity has been buoyed by government investment and the country’s growth is expected to accelerate to 2.6% this year from 1.6% in 2018, banking major NBK has said in a macroeconomic outlook.
The country’s growth is driven by a recovery in the hydrocarbon sector output (0.4%) and ongoing gains in non-hydrocarbon activity (4.4%) as the government’s expansive public investments bear fruit, it said.

Over the medium term, as infrastructure projects related to the FIFA World Cup 2022 and work on the broader Qatar National Vision 2030 advances, non-oil growth is expected to moderate to around 4% by 2021, NBK said.

By this time, the private sector should have assumed a greater role in driving diversification through greater-value add — in sectors such as manufacturing, services, transportation and real estate—as per 2018’s Qatar National Development Strategy 2018-2022 (NDS-2), NBK said in its July outlook.

NDS-2 also prioritises raising the average productivity of its local and foreign workers, which partly explains last year’s decision to offer long-term, skilled expats permanent residency and permit 100% foreign ownership across all business sectors. 
The hydrocarbon sector, meanwhile, should get a welcome boost in 2020 from the commissioning of the delayed $10bn Barzan gas production facility, NBK noted.

“This should raise gas output by 12% (2 bncf/d) and drive higher condensates and NGLs volumes. The most significant contribution, however, will come over the medium-to-long term when LNG capacity expands by over 40% to 110mn tonnes per year (mn tpy), with the addition of four new LNG trains by 2024,” NBK said.

Qatar’s fiscal position has strengthened since the authorities began the process of fiscal reform and consolidation (merging ministries, liberalising fuel prices etc.) after the oil price downturn and as energy prices began to recover from their 2016 nadir. Qatar recorded a surplus in 2018 (2.2% of GDP); that should improve further to 3.2% by 2021 amid continued spending restraint and stable energy prices, NBK said. 

“The improvement in government finances will also have a positive bearing on public debt. While the authorities accessed the debt markets in 2018 and early in 2019 — securing favourable rates amid considerable investor demand—to the tune of $24bn, debt levels are expected to fall from 53% of GDP in 2018 to 41% of GDP by 2021,” NBK’s macroeconomic outlook showed.

The external current account (CA) balance, which moved back into surplus in 2017 and reached an estimated 8.3% of GDP in 2018 should remain in surplus over the forecast period. Notwithstanding a slight deterioration in 2019 to 6.4% of GDP on softer oil and gas prices, the CA will benefit in the medium-to-long term from higher gas exports and returns from the Qatar Investment Authority’s overseas assets. 

Qatar’s banking sector, NBK noted, “has overcome the shock” of non-resident capital flight and tighter liquidity associated with the 2017 blockade. Foreign deposits have returned (+29% year-on-year), private sector credit growth is at a near-three year high (+12.6% y-o-y) and overall liquidity has improved.

But, NBK cautioned, volatile energy prices and LNG competition are the main risks Qatar faced.

It said the country faces several challenges including continued sensitivity to volatile global energy prices and capital flows as well as increasing LNG competition (especially from Australia and the US), which could put downward pressure on prices.

source: .gulf-times

The European Commission and the State of Qatar initialed today an aviation agreement, the first such agreement between the EU and a partner from the Gulf region.

The agreement will upgrade the rules and standards for flights between Qatar and the EU, and will set a new global benchmark by committing to strong, fair competition mechanisms, and including provisions not normally covered by bilateral air transport agreements, such as social or environmental matters.

Commissioner for Transport Violeta Bulc said: “We delivered! Qatar was the first partner with whom we launched negotiations following our adoption of the Aviation Strategy for Europe – now it is also the first one to cross the finish line! More than that – the agreement sets out ambitious standards for fair competition, transparency or social issues. It will provide a level playing field and raise the bar globally for air transport agreements. This is a major upgrade compared to the existing framework, and our joint contribution to making aviation more sustainable!”

Going far beyond traffic rights, the EU-Qatar agreement will provide a single set of rules, high standards and a platform for future cooperation on a wide range of aviation issues, such as safety, security or air traffic management. The agreement also commits both parties to improve social and labour policies – an achievement which existing agreements between Qatar and individual EU Member States have not provided so far.

In particular, the agreement includes the following elements:

• A gradual market opening over a period of five years to those EU Member States which have not yet fully liberalized direct connections for passengers: Belgium, Germany, France, Italy and the Netherlands.
• Provisions on fair competition with strong enforcement mechanisms to avoid distortions of competition and abuses negatively affecting the operations of EU airlines in the EU or in third countries.
• Transparency provisions in line with international reporting and accounting standards to ensure obligations are fully respected.
• Provisions on social matters committing the Parties to improve social and labour policies.
• A forum for meetings addressing all issues, and any potential differences at an early stage, plus mechanisms to quickly resolve any disputes.
• Provisions facilitating business transactions, including the removal of existing obligations for EU airlines to work through a local sponsor.

The agreement will benefit all stakeholders by improving connectivity through a fair and transparent competitive environment, and create strong foundations for a long-term aviation relationship.

According to an independent economic study undertaken on behalf of the Commission, the agreement, with its robust fair competition provisions, could generate economic benefits of nearly €3 billion over the period 2019-2025 and create around 2000 new jobs by 2025.

The European Commission negotiated the agreement on behalf of the European Member States as part of its Aviation Strategy for Europe – a milestone initiative to give a new boost to European aviation and provide business opportunities. The negotiations were successfully concluded on 5 February 2019.

Next steps

Following today’s initialling, both parties will prepare the signature of the agreement following their respective internal procedures. The agreement will enter into force once both internal procedures will be finalised.

Background

Qatar is a close aviation partner for the European Union, with more than 7 million passengers travelling between the EU and Qatar per year under the existing 27 bilateral air transport agreements with EU Member States. While direct flights between most EU Member States and Qatar have already been liberalised by those bilateral agreements, none of them include provisions on fair competition and other elements, such as social issues, that the Commission considers essential elements of a modern aviation agreement.

In 2016, the European Commission therefore obtained authorisation from the Council to negotiate an EU-level aviation agreement with Qatar. Since September 2016, the negotiators have met for five formal rounds of negotiations, in the presence of observers from EU Member States and stakeholders.

This agreement is part of the EU’s concerted efforts to ensure open, fair competition and high standards for global aviation, in line with the ambitious external agenda put forward with the Aviation Strategy for Europe. Parallel negotiations with ASEAN are at an advanced stage, and negotiations are also ongoing with Turkey. The Commission also has a negotiating mandate for aviation agreements with the United Arab Emirates and Oman. EU negotiations with Ukraine, Armenia and Tunisia have been finalised and the agreements are pending signature.

source: Eturbonewsturbonews

Qatar fast tracking policies to tap more fdis

Qatar has begun fast-tracking the implementation of “progressive policies” to further attract foreign direct investments (FDIs), HE the Minister of Commerce and Industry Ali bin Ahmed al-Kuwari has said.

FDIs increased by 4% ($7.8bn) to $186bn at the end of the first quarter of 2018 from $178bn in end-2017, al-Kuwari said at a session at the World Economic Forum in Davos, Switzerland.

This increase is driven by Qatar’s “revised legislations and regulations” to provide further incentives to foreign investors and allow up to 100% ownership in all sectors, which benefit from income tax exemptions as well as exemptions from customs duties on the import of goods for production.

Qatar is also allocating lands by way of rent for up to 50 years to foreign investors to establish their projects while allowing foreign companies to transfer their investment returns to their home countries in any convertible currency and investors to transfer the ownership of their companies to a Qatari or foreign investor in accordance with applicable laws.

Qatar now allows investors up to 100% ownership in free zones and offers tax exemptions for up to 20 years without restrictions on the repatriation of capital, the minister said.

Investors in these areas can export to local markets, tap investment funds and enter into joint ventures with local state-backed companies.

Al-Kuwari said Qatar was also in the process of drafting a public and private partnership law to pave the way for the launch of major new projects as the government bolstered spending on state-of-the-art infrastructure and logistics conforming to the highest international standards.

atar’s 2018 annual budget allocated $25.5bn for spending on major projects, the minister said, noting that these include projects related to the 2022 FIFA World Cup as well as sustainable development projects implemented within the framework of the Qatar National Vision 2030.

These projects will further promote Qatar’s tourism sector and realise plans to attract 5.6mn visitors annually by 2023 - double the number the country welcomed in 2016.

Al-Kuwari noted Qatar’s GDP increased to $222bn in 2017 compared to $218bn in 2016, growing at an annual rate of 1.6%, and expanding by over 5% in the first six months of 2018 compared to the same period in the previous year.

Quoting the World Bank, the minister said growth was estimated at 2.3% in 2018 and expected to increase to 2.7% in 2019 and 3% in 2020, mainly driven by Qatar’s “attractive” business-friendly environment.

This is evident in the ranking of Qatar on the World Economic Forum’s Global Competitiveness Report 2018, he said.

Globally, Qatar ranks first in terms of low inflation rates, sixth in terms of the effect of taxes on competition, eighth in terms of venture capital availability, ninth in terms of financing small and medium enterprises (SMEs), and tenth for growth of innovative companies while regionally the country ranks first on the Global Entrepreneurship Index, al-Kuwari added.

Source: gulf times