Qatar on track to double economy by 2031: Here’s what’s driving growth

Qatar is poised to double the size of its economy by 2031, as it restores government revenues to pre-2014 oil price shock levels, according to a new report by Standard Chartered.

The recovery is attributed to Doha’s strategic positioning in the global energy market and its ongoing efforts toward economic diversification.

Qatar, currently the world’s sixth-largest gas producer and holder of the third-largest gas reserves, has effectively leveraged rising hydrocarbon prices and a surge in global energy demand, particularly in liquefied natural gas (LNG).

The expansion of LNG capacity, with a planned 85 per cent increase in output at the North Field by 2025, is expected to nearly double the country’s natural gas production by 2030 from the current 77 million tonnes per annum (mtpa).

Read: Qatar begins work on major gas field expansion project

Standard Chartered’s Global Focus Economic Outlook Q2-2024 highlights a “calm before the upsized gas boom”, forecasting that Qatar’s gas production could sustain its economy for the next 140 years at current rates.

Although recovering from the 2014 price shock, the global oil market remains volatile due to geopolitical risks and shifts in global demand.

However, robust demand, particularly during the summer, has driven Brent crude prices towards an anticipated $100 per barrel by the end of 2024.

Qatar has been reducing its dependence on hydrocarbons

The country’s economic diversification, guided by its third National Development Strategy (2023-30), has reduced dependence on hydrocarbons, with non-oil sectors now accounting for two-thirds of its GDP.

Key growth sectors include real estate, construction, financial services, trade, manufacturing, logistics, and tourism.

LNG sector in focus

The LNG sector remains a cornerstone of the Qatari economy, contributing about 70 per cent of government revenue and 80 per cent of export receipts.

Investments in downstream industries have further strengthened the manufacturing and petrochemical sectors, while infrastructure projects related to the World Cup and Qatar National Vision 2030 have spurred growth in construction and real estate.

Foreign investment and international financial institutions have played a vital role in the country’s diversification strategy, particularly in non-oil sectors.

Reforms to improve the investment climate, such as easing foreign ownership restrictions and enhancing the legal framework, have attracted significant investments in infrastructure and the energy sector.

“Qatar’s return to pre-2014 government revenue levels marks a significant milestone in its economic journey,” said Muhannad Mukahall, CEO and head of CCIB at Standard Chartered, Qatar.

“Higher hydrocarbon prices, increased global demand for LNG, and substantial economic diversification efforts strategically drove this achievement. It represents a remarkable turnaround in the face of volatile oil prices and an ever-shifting geopolitical landscape,” he added.