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Standard Chartered’s Bank Expects Spike in Qatar’s Growth in 2025

Doha: Standard Chartered Bank expects growth in Qatar to spike above trend when the planned liquefied natural gas (LNG) capacity expansion begins to go online in 2025.

Chief Executive Officer and Head of CCIB at Standard Chartered Bank – Qatar, Muhannad Mukahall, commented “We expect to see positive growth in Qatar in the coming years as work on the substantial liquefied natural gas (LNG) capacity expansion project begins to pick up pace. The newly-announced expansion at North Field West adds a further 16 million tonnes of LNG per year to existing plans and will no doubt aid Doha on its quest to dominate the top spot for the worlds top LNG producers. Our research shows this will boost the private-sector, increase GDP and therefore massively stunt public debt.” According to the Banks Global Focus Economic Outlook Q2-2024, which covers the outlook for 58 economies, key geopolitical issues and financial market implications this year and beyond, the Bank forecasts a calm before the upsized gas boom in Qatar and
predicts the post-FIFA slowdown to change pace next year.

Qatar now aims to increase output at the North Field by 85% versus 64% previously, which would take natural gas output to 126 million tonnes per annum (mtpa) by end-2027 and 142mtpa by end-2030, from 77mtpa currently.

Qatars investment in the recently upsized gas capacity expansion is likely to support private-sector activity. The research notes private-sector credit growth was 6% y/y in January, exceeding GDP growth, which dipped to 1.0% y/y in Q2-2023 from 8.0% in Q4-2022.

The planned expansion of LNG output and subsequent boost to GDP is also expected to rein in public debt to 30% by 2027. Prior to that, the report estimates that public debt will decline to 37.5% of GDP by end-2024 and 35% by end-2025, from a peak of 73% in 2020 assuming Qatar continues to use its surpluses to pay down external debt (external debt maturities are USD 4.8 billion in 2024 and USD 2 billion in 2025).

The State of Qatar’s fiscal breakeven oil price is the lowest amon
g oil-exporting regional peers, standing at just USD 50/bbl. Comparatively, reserves stood at USD 67.6 billion in January, rising USD 10 billion since early 2022.

Overall, the Global Focus Economic Outlook Q2-2024 also indicates Asia is set to remain the primary engine of global growth, with Africa and MENAP expected to grow faster in 2024 than in 2023.

It expects global GDP growth of 3.1% this year, unchanged from 2023, and 3.2% in 2025, an improvement from earlier forecasts of 2.9% and 3.1%.

Source: Qatar News Agency