Monday, 28 March 2011

gulfnews : GCC Focus: Qatar's growth model an eye-opener

Credible economic sources disagree on the extent but not the ability of Qatar's economy to register steady growth rates. For instance, the International Monetary Fund (IMF) put Qatar's gross domestic product (GDP) growth at 16 per cent in 2010 only to raise it to 20 per cent in 2011.

Similarly, a recent report issued by Samba bank of Saudi Arabia projects Qatar's GDP growth at 19 per cent for 2011, up from 16 per cent in 2010. Joyfully, all these figures are in real terms, meaning adjusted for inflation. Fortunately, inflationary threats are not substantial nowadays notwithstanding rising oil prices.

In fact, inflation was a real problem in 2007 and part of 2008 at the height of rising oil prices together with the declining value of the American currency. Oil prices reached a record $147 per barrel in July 2008 only to drop sharply as the global financial crisis began to unfold. However, changing circumstances relating to the global financial crisis and new insights gained on the way have helped keep inflationary pressures in check.

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