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Qatar is “well-positioned” to manage the impact that lower oil prices have had on its revenue, the International Monetary Fund (IMF) has said.

The country has taken the necessary first steps to handle new deficits by cutting expenditures and diversifying its economy, the IMF added in a recent assessment.

Though there is a risk of rising inflation and continued lower oil prices, the fund has expressed confidence in Qatar’s economic future.


Qatar: Selected Economic and Financial Indicators, 2013–2018

That said, it still forecast the cost of living (CPI) in Qatar to rise from 2.6 percent currently to 5.7 percent by 2018.

This is likely due to the upcoming rollout of two new taxes in Qatar, a value-added one and a selective tax on fast food, luxury goods and other items.


One indicator of Qatar’s economic health has been its GDP. It rose from 2.7 percent in 2016 to an expected 3.4 percent this year, thanks to investment in infrastructure projects.

To keep things running smoothly, the IMF offered several suggestions to authorities.

Reem Saad / Doha News

The price of petrol rose five months in a row before leveling off in April.

For example, it urged Qatar to continue its plans to cut subsidies, lower spending and roll out its new taxes.

The IMF also encouraged Qatar to do more to ensure it is efficiently managing its investments. And it suggested further transparency is needed when explaining the country’s fiscal position.

Other ideas included:

  • Enhancing anti-money laundering efforts to combat the financing of terrorism;
  • Strengthening banks by developing a more “active liquidity forecasting framework”; and
  • Improving Qatar’s business environment through labor market and education reform.


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It’s likely going to be a few more years before Qatar’s economy begins to show signs of recovery, according to the nation’s wealthiest residents.

A recent study of high net worth individuals (HNWIs) across the Gulf found that only 42 percent of respondents in Qatar believed the economic situation in the country was improving.

A further 25 percent felt that it was getting worse, found the 2017 GCC Wealth Insight Report, which is produced annually by Emirates Investment Bank.

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Meanwhile, the remaining 25 percent of those surveyed in Qatar said they believed the economy was staying the same.

Sentiments were a lot more optimistic in the UAE, where 69 percent of HNWIs felt things were improving.

The forecast on Qatar’s economy comes following mass layoffs due to a drop in global oil prices, and ensuing government budget cuts.

Qatar also saw its first budget deficit in more than a decade last year, and is forecasting another (albeit smaller) one for 2017.

Regional gloom

Across the GCC, fewer respondents also felt confident about the region’s economy this year than in 2016.

Seventy-five percent of HNWIs interviewed said that they were optimistic about the economic prospects for the region over the next five years – down 8 percent from last year.


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The main reasons for this growing pessimism included conflicts in the region, a global drop in oil prices, and general instability in the region’s economies.

Interestingly, the report’s authors noted that interviews for the survey were conducted between September and December 2016, with the majority of interviews completed before the US presidential election and the fall of Eastern Aleppo in Syria.

Global uncertainty

Wealthy individuals in the GCC remain fairly pessimistic about the biggest picture this year, too.

Almost half (47 percent) of those questioned think that the global economy is getting worse. And just 15 percent say the situation is improving.



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Among the 47 percent of respondents who felt the global economic situation was worsening, most said this was due to political instability, conflict and the threat of terrorism.

However, just over three quarters of HNWIs (76 percent) were optimistic about the economic prospects for the global economy over the next five years, a sign that they believe things will eventually get better.

Attitudes toward women

The report also revealed attitudes toward women in positions of power across the Gulf region.

Only 14 percent of the HNWIs interviewed were women.

When all respondents were questioned about promoting women in the workplace, only 59 percent supported the introduction of quotas to bring more women onto the boards of public GCC companies.

Meanwhile, some 73 percent of all respondents supported encouraging women to move into board-level positions in the first place.

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And finally, 77 percent of those questioned supported moves to promote more women to high-ranking managerial positions.

A report released last year concluded that two out of every 100 people in Doha are millionaires, making the city home to the highest density of millionaires in the Middle East.


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A draft law governing new “selective” taxes has been approved by Qatar’s Cabinet and could be implemented as early as April this year.

According to QNA, the tax will be “imposed on goods harmful to human health and the environment,” as well as specific luxury items.

Officials in Doha had first warned of the upcoming sin taxes last June, but said they would apply to tobacco, fast foods, and soft drinks.

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It is unclear what a selective tax related to the environment or luxury goods would look like.

QNA added that Qatar’s law was prepared in accordance with a unified GCC agreement. It did not state when the tax would be rolled out.

But the International Monetary Fund (IMF) said Qatar’s sin taxes would start this year.

And last month, Saudi finance minister said they could be introduced across the GCC in April.

The Gulf is also on track to introduce a separate, value-added tax in 2018.

That consumption tax will most likely affect businesses. It is expected to exempt certain food items, as well as the cost of education, healthcare and social services.

Health spending

The decision to impose sin taxes comes at a time when Gulf countries are seeking additional revenue streams due to lower oil prices.

But another incentive to impose the fees could involve rising healthcare costs.

Qatar and other GCC nations heavily subsidize healthcare for their citizens, and the growing prevalence of diseases like obesity and diabetes are taking their financial toll.

Quinn Dombrowski/Flickr

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By 2020, Qatar’s healthcare costs are expected to double to $8.8 billion a year as it contends with a larger, older and sicker population, Alpen Capital said.

BMI Research has forecast that the region will take these rising costs into account. In a report this month, it added that the longstanding obesity epidemic will be a key driver of policy decisions in the coming years.

Rising debt

Meanwhile, taxing luxury goods could provide residents a financial incentive to spend within their means.

That’s no small feat in Qatar, where 75 percent of the local population is in debt.

Chantelle D'mello / Doha News

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A Qatar University study found this was in part due to social expectations on nationals to buy the “right” watches and handbags.

There is also pressure to have the “right” furniture or chocolates to offer guests, and to attend parties and give expensive gifts.

Concerned about this trend, Qatar’s Emir has urged residents to “cut extravagance and waste.” He’s also reminded them that the government can no longer “provide for everything.”