Government spending on projects such as the FIFA World Cup in 2022 is expected to keep Qatar’s banking system stable despite the impact of low oil and gas prices.
Ratings agency Moody’s, which made the prediction, anticipated economic growth in Qatar to be 4.1% this year. Although less than the double-digit rates seen in recent years, this growth is stronger than in many other oil and gas-exporting countries in the region.
“We expect continued spending by the Qatari government to support credit growth, thereby providing a relatively robust lending environment for the country’s banks,” said Nitish Bhojnagarwala of Moody’s.
Like many of the Gulf countries, Qatar government derives much of its revenue from the hydrocarbon sector. In Qatar’s case, exports of liquefied natural gas are a key supplier of government funds. Gas prices have fallen in line with the oil price, which began its decline at the end of 2014 and is currently $47 for a barrel of Brent crude, less than half what it had been at its peak.
Despite the economic slowdown caused by low oil and gas prices, Qatar’s banking system was deemed to be stable by Moody’s, a judgement that has remained unchanged since 2010.
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