Qatar: Selected Issues
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International Monetary Fund. Middle East and Central Asia Dept.
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This Selected Issues paper develops a Financial Conditions Index (FCI) for Qatar and uses the Growth-at-Risk (GaR) framework to examine the impact of financial conditions on Qatar’s non-hydrocarbon growth. The analysis shows that the FCI is an important leading indicator of Qatar’s non-hydrocarbon growth, highlighting its predictive potential for future economic performance. The GaR framework suggests that overall the current downside risks to Qatar’s baseline non-hydrocarbon growth projections are relatively mild. The GaR analysis highlights the importance of domestic and external conditions as indicators of real non-hydrocarbon gross domestic product growth performance. Domestic conditions seem to offer the strongest signal in the short term, whereas the effects of external conditions are significant in both the short and medium term. Overall, the current downside risks to Qatar’s baseline non-hydrocarbon growth projections are relatively mild. Alternative scenario tests indicate that future non-hydrocarbon growth could improve following a reduction in the policy deposit rate. Additionally, non-hydrocarbon growth is primarily influenced by oil prices, with minimal effects stemming from global financial market uncertainty.
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