Qatar economy feels the heat of global economic slow down

Dun & Bradstreet South Asia Middle East (D&B) in association with Qatar Financial Centre (QFC) Authority and Al Khalij Commercial Bank (al khaliji) released today the D&B Business Optimism Index for Qatar for Q2 2009.

The D&B Business Optimism Index (BOI) for Q2 2009 was conducted in March 2009 against the backdrop of crude oil prices hovering around US$ 45 and a deepening global recession. According to a recent IMF report, the Qatari economy is expected to grow by 29% in 2009 in spite of the slowdown in world economy. The State is expected to maintain a budget current account surplus, despite increased spending to stem the impact of the global financial crisis. However, the BOI report for the second quarter reveals that sentiments in the Qatari economy have taken a hit due to the outlook of the global economy.

Commenting on the overall findings of the BOI, Rajesh Mirchandani CEO of Dun & Bradstreet South Asia Middle East Ltd. says, "The outlook for second quarter is low key as compared to the previous quarter due to ongoing global economic uncertainty. According to the BOI survey, demand levels in the Qatari economy are expected to decline which will impact the profitability of business units across all sectors. Most business units are likely to tread cautiously in maintaining inventory levels and hiring new employees in light of the declining demand outlook. However, inflation is expected to decline further in the second quarter."

Robin McCall, al khaliji's Acting Chief Executive Officer, commented on the BOI results: "Government increased spending and latest measures to help the banking and financial sectors will positively affect the economy and boost the liquidity in the financial system. In al khaliji, we see two positive outcomes in the Q2 2009 Business Optimism Index: first, inflation will continue to decrease; second most businesses expect the global economy to recover in 2010"

Stuart Pearce, CEO and Director General of the QFC Authority, said "While there is underlying strength in the Qatari economy as demonstrated by the ongoing investment activity at the upper end of the economy, this report underlines that the Qatari government is correct in taking measures to support the local banking sector so as to ensure that unlike other economies its capacity to lend to the commercial sector is not undermined by falling asset values. On the brighter side the number of firms expressing interest in operating in and from Qatar through the QFC has not dropped over the past year and if anything has increased."