Economy

New Qatari PM takes helm as business activity bounces back

March 7, 2023, 1:17 PM

Qatar's new prime minister Sheikh Mohammed, pictured in Doha last November, will inherit a rebounding private sector

February PMI records highest month-on-month growth since 2020
Conditions said to have ‘normalised’ after post-World Cup correction

Business activity in Qatar rebounded in February, recording its highest month-on-month growth since the country lifted its Covid lockdown.

The Qatar Financial Centre purchasing managers’ index (PMI) – released one day before the cabinet reshuffle that elevated Sheikh Mohammed bin Abdulrahman Al Thani to prime minister – hit 51.9 in February, up 6.2 points from 45.7 in January.

It was the biggest monthly PMI increase since July 2020, when Qatar began lifting pandemic restrictions, and the second highest since the index was launched in April 2017.

This drove private sector firms’ expectations for the next 12 months to their highest level since September 2019, according to the report.

Yousuf Mohamed Al Jaida, CEO of the Qatar Financial Centre Authority, said the February results “suggest that business conditions in the non-energy private sector have normalised following a correction at the start of the year.

“The key indices for output and new orders both rebounded solidly, with demand improving across all four of the main sectors monitored.”

The indicators are likely to be welcomed by Qatar’s new cabinet, announced on Tuesday by Emir Sheikh Tamim bin Hamad Al Thani.

Sheikh Mohammed will retain the role of foreign minister as well as becoming PM. The emir has also reappointed Ali bin Ahmed Al Kuwari as finance minister and Saad Al Kaabi as energy minister.

The new prime minister previously served as chairman of sovereign wealth fund the Qatar Investment Authority. The emir has appointed Sheikh Bandar bin Mohammed Bin Saoud Al Thani, the governor of the central bank, to replace him.

A post-World Cup correction

In the Qatar PMI report for February, the headline figure was boosted by growth in output and new business. Both increased at rates broadly comparable with their long-term averages after a World Cup 2022 bounce followed by a correction in January.

In addition, demand rebounded in the wholesale and retail sector in February.

The report, compiled by S&P Global, also indicates growing wage pressures: the staff costs index hit a 17-month high while the employment index was little changed from January’s six-month high.

Overall cost pressures eased slightly since January, reflecting a decline in purchase prices.

The PMI’s future output index rose for the seventh month running to a 41-month high of 82.7, indicating a strong degree of optimism. It has risen by a combined 21 points in 2023 so far.

Al Jaida added: “Firms widely reported the beginning of new projects and successful marketing campaigns, which also boosted confidence in the outlook.”

The Qatar PMI indices are compiled from survey responses from a panel of around 450 private sector companies.