Fifa World Cup helped Qatar's economy expand 8% in fourth quarter

Robust economic activity in the last quarter lifted the country's real GDP growth to close to 4.8 per cent in 2022

Fireworks explode as artists perform during the World Cup closing ceremony at the Lusail Stadium in Qatar. AP
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The successful hosting of the Fifa World Cup boosted Qatar's economy to grow by eight per cent on an annual basis in the fourth quarter of last year, S&P Global Market Intelligence said in its latest report.

The Arab country’s gross domestic product jumped to 179.99 billion Qatari riyals ($49.44 billion) at constant prices in the fourth quarter of last year, compared with 166.68 billion riyals in the same period in 2021, Qatar’s Planning and Statistics Authority said in its preliminary estimates released on Tuesday.

“[The growth] is in line with our expectations and propped up by strong services sector activity amid the Fifa World Cup hosting,” Jamil Naayem, principal economist at S&P Global Market Intelligence, said on Wednesday.

Robust fourth quarter economic activity lifted Qatar’s real GDP growth to close to 4.8 per cent in 2022, “a level unseen since the middle of the last decade”, the report said.

Qatar's hosting of the $220 billion grand sporting event spurred tourism, with retail and hospitality also benefiting.

The overall attendance at World Cup matches was 3.4 million, the Qatar News Agency reported.

Following the strong growth last year, S&P Global Market Intelligence predicts Qatar's economic expansion to slow down this year due to “weaker global demand, tighter financing conditions and unfavourable base effects due to the World Cup hosting”.

Qatar’s real GDP will expand 2.7 per cent this year and 3.4 per cent in 2024, according to its forecast.

“We continue to expect slower real GDP expansion throughout 2023 as weaker global demand, higher domestic interest rates, and less favourable Q4 base effects weigh on real GDP growth performances.”

Given the long-standing currency peg to the US dollar, the Qatar Central Bank is raising its key policy rates since March last year, in line with its US counterpart, the US Federal Reserve.

With "at least one more" interest rate increase expected by the Fed, "we therefore likely have not seen the last interest rate hike from the Qatari central bank during this tightening cycle", the report said.

Lower global commodity prices, receding global supply chain disruption concerns and higher borrowing costs will help reduce inflationary pressures in Qatar, it added.

Average annual inflation in Qatar is expected to decline to 3.8 per cent this year from a high of 5 per cent last year, before dropping further to 3.1 per cent in 2024.

“We expect moderating global energy prices to lead to lower, albeit still healthy fiscal surpluses/GDP closer to mid-single digits in 2023–2024 (10 per cent in 2022)," S&P Global Market Intelligence said.

“Enhanced foreign currency earnings generation and comfortable fiscal surpluses will allow the government to reimburse part of its foreign currency debt stock, thus leading to even more moderate sovereign debt-to-GDP ratios in the near term."

Last month, Qatar was ranked fourth in a list of top 25 emerging market globally in Kearney’s 2023 Foreign Direct Investment Confidence Index.

The successful hosting of the World Cup last year boosted investors’ interest in Qatar, the report said.

Updated: April 05, 2023, 6:00 PM