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Fitch: Qatar's non-oil growth forecast to slow in 2016

Staff writer ▼ | April 15, 2016
Growth in Qatar's non-oil economy is forecast to slow this year to 6 percent from an estimated 8 percent last year, according to Fitch Ratings.
Development   Fitch Ratings affirmed Qatar at AA
The ratings agency said in a statement that average non-hydrocarbon growth in Qatar has been 10 percent over the past five years.

It said the slowdown will be a result of a less benign fiscal environment, where a contraction in current spending and a focus on fiscal efficiency leads to a slowdown of both private and public consumption growth.

Hydrocarbon growth will pick up to 2.2 percent in 2016, after contractions of 3.2 percent in 2015 and 1.5 percent in 2014.

This will raise overall growth to 4.1 percent in 2016 from 2.2 percent in 2015, despite the slowdown in non-hydrocarbon growth, Fitch added.

Fitch Ratings affirmed Qatar's long-term foreign and local currency issuer default ratings at 'AA' with a stable outlook, saying the ratings reflect Qatar's large sovereign assets, the government's fiscal adjustment efforts, a large hydrocarbon endowment and one of the world's highest GDP per capita.

The agency added that it expects the government to post deficits of around 10.4 percent of GDP (QR61 billion) in 2016 and 2.7 percent of GDP (QR18 billion) in 2017, as lower oil and gas prices hit revenues.