Analysis of Qatar’s Economy
Qatar’s economy entirely depends on petroleum and liquefied gas products. These products contribute to more than 70% of the total government revenue, about 60% of gross domestic product (GDP) and more than 80% of export earnings. While maintaining the output at the current levels, the country’s oil reserves, which is about fifteen million barrels should be able to support the country for twenty-three years. The oil production has made the country to be ranked among the world’s top producers. Also, the country’s natural gas reserves are about a capacity of 7000 km3, which is more than 5% of the world’s total volume and making the country the world’s largest gas reserve (Global research Qatar, 2004).
The consumer prices in the country have been steadily increasing throughout the subsequent years. On February 2016, inflation was reported at 3.3% compared to the immediately previous year’s 2.8%. This was the highest figure reported since 2014 as the housing and utility prices recorded an increment of 5.7 percent while transport recorded an increase of 2.1 percent. On the other hand, the cost of food and beverages fell by 1.3 percent. On a month-on-month basis, the consumer price index was recorded at an increment of 0.6 percent. The country’s average rate of inflation was estimated at 3.46 percent between 2005 and 2015. However, an all-time inflation rate was recorded at a highest of 16.59 percent in June 2008 and a minimum of negative 9096 percent in December 2009 (Qatar, 2009). The graphical representation of the rate of inflation in Qatar is illustrated in appendix one. The items considered when computing the rate of inflation include rent, fuel and energy.
2. Gross Domestic
Product According to the Qatar’s Ministry of Development Planning and Statistics, the country has forecasted its 2015 growth to 7.3 percent from the expected 7.7 percent. Therefore, the country is expecting a budget deficit in 2016. The country expected a fiscal surplus to reduce in 2015 to 1.4 percent of nominal gross domestic product from 12.3 percent in 2014. Nonetheless, the country’s macroeconomic indicators show that the country’s state of the economy is bettering annually. The country’s economic growth largely depends on oil and gas sectors. The continued growth of the petroleum sector alongside a strong private sector activity between 2003 and 2008 resulted in the country’s strong economic growth. As a consequence, the country’s nominal GDP grew by 41.3% with a corresponding $100.4 billion in 2008 in comparison to a growth of 24.8% which corresponded to $71 billion recorded in 2007. Nonetheless, the economy was hit by stunting growth rate of negative 16.4% in 2009 corresponding to $83.9 billion due to the global financial and economic crisis. Luckily, the economy was back to its steady growth of 32.1% and 18.9% corresponding to $110.8 billion and 131.8 billion in 2010 and 2011 respectively. The country’s reliance on gas exports and the subsequent increases in prices of oil …