Economic Outline

Economic Indicators

The Emirate’s economy is heavily concentrated in the gas industry, which represents two-thirds of its GDP and around 85% of export earnings. Following the 2022 FIFA World Cup, growth normalization persisted, with recent signs of strengthening activity. According to the IMF, real GDP is projected to gradually rise to 2% in 2024–25, driven by public investment, spillovers from the ongoing LNG expansion, and robust tourism. Over the medium term, growth is expected to accelerate to an average of 4.75%, fueled by a major LNG production boost and early benefits from reforms under the Third National Development Strategy (NDS3). With lower hydrocarbon prices, Qatar's current account and fiscal surpluses narrowed in 2023 to 17% and 5.5% of GDP, respectively, and moderated further in 2024. Over the medium term, despite a significant LNG production expansion, both surpluses are expected to persist but decline as a share of GDP due to falling hydrocarbon prices.

The overall fiscal surplus narrowed to 5.6% of GDP in 2023 and declined further in the first three quarters of 2024 as hydrocarbon revenues weakened. The 2024 budget had planned spending cuts of 2 percentage points of GDP from the 2023 outturn, mainly in capital expenditure, but fiscal data up to Q3 suggested milder cuts, closer to 1.5 percentage points of GDP. Despite this, the fiscal stance tightened, with the NHPB improving by around 0.75 percentage points of non-hydrocarbon GDP. Looking ahead, the 2025 budget outlines prudent spending plans amid a growth rebound, while the medium-term budget has been updated to align with NDS3 spending needs, maintaining a path of gradual fiscal consolidation (IMF data). Fitch Ratings expects Qatar's debt-to-GDP ratio to drop to around 43% by 2027, down from 49% in 2024 and a peak of 85% in 2020. This is based on the assumption that the government will refinance most of its upcoming external debt and pay down loans with a moderate budget surplus, excluding QIA investment income. How the government uses its fiscal surpluses in the future will determine the debt path going forward. Headline inflation dropped from 5% in 2022 to 3% in 2023 (average for the year) and slowed further to 1.2% by October 2024, as inflation in rent and recreation services eased. Producer prices and wage inflation stayed under control.

Qatar is overall a politically stable, rich country (it had one of the highest incomes per capita in the world in 2024 according to the IMF, estimated at USD 115,074 – PPP). It is estimated that 85% of the inhabitants are expatriates, whose rights are limited, despite the progress made with recent reforms. According to the World Bank, unemployment is almost null, representing 0.1% of the total labour force in 2023 (latest data available).

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