As of December 2024, Qatar maintains its status as a leading economy in the Middle East, with a nominal GDP projected to reach approximately $240.01 billion by the end of the year. Renowned for its substantial natural gas reserves, Qatar’s economic framework is bolstered by its energy exports, alongside significant investments in infrastructure, finance, and real estate. The nation’s strategic initiatives toward economic diversification and sustainable development continue to reinforce its position as a pivotal player in the global energy market and a burgeoning hub for international business and finance.
Economic Trends
GDP Growth: Qatar’s economy has shown signs of a gradual rebound from the post-World Cup growth moderation. Near-term real GDP growth is expected to reach 2%, supported by public investment, spillovers from the ongoing LNG expansion project, and strong tourism. The medium-term outlook is more favorable, with average annual growth projected to be around 4.75%, benefiting from significant LNG production expansion and the implementation of the Third National Development Strategy (NDS-3).
Purchasing Managers’ Index (PMI): Qatar’s non-energy private sector concluded 2024 on a high note, with the PMI steady at 52.9 in December, signaling solid growth. Employment and wages saw record increases, with demand for workers rising across manufacturing, construction, and services. The financial services sector experienced a sharp rise in employment and holds an optimistic outlook for 2025.
Inflation: Following earlier monetary policy tightening, headline inflation is likely to ease to 1% in 2024 and gradually converge to 2%.
Investment Trends
Sovereign Wealth Fund Activity: The Qatar Investment Authority (QIA), with assets under management around $500 billion, plans to deploy capital more aggressively under its new CEO, Mohammed Al-Sowaidi. The fund aims for larger deals and increased investment frequency, focusing on sectors like technology, artificial intelligence, healthcare, real estate, and infrastructure, particularly in the US, UK, and Asia. Qatar’s significant revenues from liquefied natural gas (LNG) could potentially double the fund’s size over the next five years.
Foreign Direct Investment (FDI): Qatar’s investment landscape is being shaped by strategic moves aimed at steering the economy away from its traditional hydrocarbon dependency. The Third National Development Strategy (NDS-3), initiated in January 2024, sets forth pivotal goals centered on economic diversification and bolstering private sector involvement.
Interest Rate Adjustments: On December 18, 2024, the Qatar Central Bank reduced key interest rates by 30 basis points, following the US Federal Reserve’s recent rate cut. The deposit rate was lowered to 4.60%, the lending rate to 5.10%, and the repo rate to 4.85%.
Sector-Specific Developments
Energy Sector: Qatar continues to expand its LNG production capacity, reinforcing its position as a leading global energy supplier. This expansion is expected to significantly contribute to GDP growth in the medium term.
Technology and AI: Qatar is investing heavily in data and artificial intelligence (AI) to drive economic growth. A report launched in December 2024 highlights the transformative role of data and AI in shaping Qatar’s economic future, positioning the country as a regional leader in digital transformation.
Financial Services: The sector has seen significant growth, with institutions like Qatar National Bank (QNB) reporting a 10% year-over-year increase in net profit for the fourth quarter, reaching 4 billion riyals ($1.1 billion). For the full year, QNB’s net profit rose by 8% to 16.7 billion riyals.