Reuters: Qatar plans to spend more than USD125 billion in 2011-2016

Qatar plans to spend more than USD125 billion in the next five years on construction- and hydrocarbon-related projects, according to the Gulf-state’s new national development strategy for 2011-2016 released on Monday. Qatar’s economy is expected to grow by 15.7% in 2011, before slowing down to 7.1% in 2012. The 7.1% economic growth for 2012 forecast is based on “a price of oil that is now higher”, Secretary General at the General Secretariat for Development & Planning, Ibrahim al-Ibrahim, was quoted as saying. We are forecasting a higher nominal growth rate of 22.5% in 2011, likely as a result of higher energy prices. The government scenario is based on average oil prices of USD86/barrel. Our 2012 growth forecast is similar at 8.2%.

The medium-term outlook continues to reflect the strong investment outlook, led by public sector activity. There continues to be a focus on hydrocarbon-linked investment, but there is a strong focus on wider infrastructure development, in line with hosting the 2022 FIFA World Cup.

It is believed that with an increasing shift to infrastructure projects, as LNG-related projects are being completed, domestic funding will become more important. Qatar plans to invest over QAR130 billion (USD35.7 billion) in 2011-2016 through its state-linked companies, including about QAR100 billion by Barwa Real Estate Company (BRES.QA) and Qatar Diar for residential and business construction projects. Qatar Petroleum and its subsidiaries are expected to spend a further QAR88 billion. State infrastructure spending will likely exceed USD67 billion, including roads, port, power and water, according to the document. We expect to see real non-oil GDP averaging around 10% in 2011-2013. The strong investment activity and 2022 FIFA World Cup infrastructure spending should now result in a higher medium-term real non-oil GDP growth of around 8-13% in 2015-2019.