World Cup boosts Qatar’s GDP growth to seven-year high

Kyodo via Reuters

• Qatar recorded annual growth of 4.8% in Q4 2022
• Service sector growth during the World Cup boosted GDP
• Qatari Purchasing Managers’ Index grew for 4th month in 5

A surge in economic activity in the last quarter of 2022 lifted Qatar’s annual GDP growth to 4.8 percent – a level of growth unseen since the middle of the last decade, according to new data from S&P Global Market Intelligence.

The Gulf state’s real GDP grew by a robust 8 percent year on year in the fourth quarter of 2022, as it benefited from the first-ever staging of the World Cup in the Middle East, according to preliminary data released by Qatar’s Planning and Statistics Authority.

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Jamil Naayem, principal economist at S&P Global Market Intelligence, said Qatar’s GDP growth was “propped up by strong services sector activity” during the hosting of the tournament in November and December.

Meanwhile, data from the Qatar Financial Centre (QFC) shows that Qatar’s Purchasing Managers’ Index (PMI) rose for the fourth time in five months to 53.8 in March, from 51.9 in February. This indicated the strongest improvement in business conditions since July 2022.

A PMI is based on surveys of selected companies on a monthly basis to ascertain prevailing economic trends. A score above 50 indicates economic growth.

Faster growth in output and new business, which both increased at rates well above average, were the main reasons for the uplift in March’s index score.

Businesses reported new customers and investments and the wholesale, retail and services sectors registered the strongest growth rates for activity and new orders during the third month of this year.

The PMI was also lifted by the employment index, which rose to an eight-month high.

“The financial services sector continued to be a key spur to overall growth in March, with the rates of expansion in activity and new business remaining stronger,” said QFC Authority CEO Yousuf Mohamed Al-Jaida.

While the latest figure was still above the long-run trend of 52.2, the month-on-month rise of 1.9 was less pronounced than that of January to February. At 6.2 points, this was the second largest observed since the series began in April 2017.

The QFC’s 12-month outlook for the non-energy private sector remained strongly positive. By sector, confidence in March was strongest among service providers, followed by manufacturers.

However, S&P Global Market Intelligence said that it expects slower real GDP growth throughout 2023 as a result of weaker global demand, higher domestic interest rates, and less favourable Q4 base effects.

It is forecasting 2.7 percent real GDP growth for 2023 and a slightly higher 3.4 percent increase in 2024.

“S&P Global Market Intelligence expects growth in the real economy to slow in the near term, within the context of weaker global demand, tighter financing conditions, and unfavourable base effects due to the World Cup hosting in Q4,” said Naayem.