Other Services
                 Trade, Restaurants and Hotels


Qatar’s GDP growth has been rapidly rising in recent years, averaging 14.7% over the past five years, with the increased export of LNG and related industries providing for the overall positive trend in GDP growth. Preliminary figures released by the Planning Council shows that nominal GDP grew by an estimated 8.8% in 2003 to reach QR 70.8 billion, compared to a marginal growth of 0.8% in 2002. In 2003, the Oil & Gas sector is estimated to have increased by 12.9% to reach QR 42.3 billion, while the Non-Oil sector is estimated to have increased by 3.2% to reach QR 28.5 billion.
Final GDP data for 2003 are anticipated to show an increase of 10.5% according to QNB estimates, compared to currently published figures by the Planning Council of a 8.8% growth. For 2004, QNB forecasts a nominal GDP growth rate of 5.2% .

In 2003, the following factors contributed in the overall GDP trend:

• The price of Qatar’s crude oil increased by 13.9% to $27.9 p/b, from $24.5 p/b in 2002, according
to the Middle East Economic Survey (MEES).
• Qatar’s crude oil production increased by 11.6% to 714,000 bpd, from 640,000 bpd in 2002,
according to MEES.
• The Oil & Gas sector GDP increased by 12.9%, as compared to a rise by 1.9% in 2002.
• Higher LNG exports, which increased by 6.7% to reach 14.4 million tons, from 13.5 million tons
in 2002.
• An improved performance from the Non-Oil sector, with a growth of 3.2%, as compared to a
decline by 0.6% in 2002.

The Non-Oil and Gas Sector

The Non-Oil and Gas sector contributed 40.2% of GDP in 2003 (Figure 2.2), recording a growth of 3.2% over 2002. The main components of this sector are the following:

Other Services:

The Other Services sector, which includes government services, social services, household services, imputed bank service charges and import tariffs, makes the largest contribution to GDP of the non-oil and gas sectors, and in 2003 contributed QR 8,970 million (representing 12.7% of total GDP), compared to QR 8,368 million in 2002. At current prices, this sector grew by 7.2% in 2003.

Finance, Insurance and Real Estate:

The Finance, Insurance and Real Estate sector is comprised of five sub-sectors: banking, insurance, money exchange, real estate and business services. In terms of relative contribution to GDP, this sector contributed QR 5,348 million, the second highest among the non-oil and gas sectors and grew by 3.8% at current prices in 2003. This sector represented 7.6% of Qatar’s GDP in 2003.

Manufacturing industry:

In 2003, the Manufacturing sector made the third largest contribution to GDP among non-oil and gas sectors. This sector grew by 1.3% at current prices, contributing QR 3,960 million, which represented 5.6% of total GDP. This sector is strongly supported by the Government as a part of a general policy to diversify income sources and to maximize the utilization of Qatar’s natural resources.
The major sub-sectors of the Manufacturing sector are petroleum refining, industrial, chemicals, fertilizers and steel, which utilize natural gas as feed-stock and/or fuel. Other important activities include the production of flour, cement, concrete, plastics, textiles and footwear, household articles and paint.
The Government promotes small and medium-scale industrial projects through two vehicles, the Qatar Industrial Manufacturing Company (QIMCO) and the Qatar Industrial Development Bank (QIDB). The Government owns 15% of the shares in QIMCO, with the remaining 85% of QIMCO’s shares held by private investors. QIMCO’s shares are traded on the Doha Securities Market. QIDB is government owned and gives loans to small and medium scale companies in Qatar at competitive rates of interest.

Building and Construction:

The recent pace of developments in the Building and Construction sector is quite evident around Doha over the past few years, and as such this sector continues to be a major contributor to the GDP and employment of labor force. This sector witnessed a growth
of 3.6% in 2003, contributing QR 2,850 million to overall GDP. Credit facilities extended by commercial banks to the land, housing and construction sector increased by 158.5% to reach QR 3,327 million in 2003, and at the current pace this trend is likely to continue in the coming years.
Public expenditure is a very important factor affecting the future of this sector, and the realization of budgetary surpluses in the last four fiscal years has increased the level of public spending. Allocation for major public projects in the 2004/05 Budget has seen a rise by 44% to reach QR 8.9 billion, which covers the areas of public services, infrastructure, social and health services, and education and youth welfare.

Trade, Restaurants and Hotels:

The Trade, Restaurants and Hotels sector contributed QR 3,750 million to Qatar’s overall GDP in 2003, representing 5.3% of total GDP. This sector will be one of the most promising in the coming years, as business, cultural, sports, education and tourism events aimed at promoting Qatar, gathers even more momentum. According to the Qatar Tourism Authority (QTA), the average hotel occupancy rates in Qatar during 2003, increased to 65%, from 62% in 2002 and 55% in 2001. Qatar’s hotel room capacity in the luxury sector is expected to increase by an additional 1,966 rooms in the coming years as a result of up-coming projects such as the Four Seasons Hotel, the Doha Hilton, the Shangri-La, the Renaissance, the Regency, the Marriott Courtyard and the Rotana amongst others. The Qatar Tourism Authority which was established in the year 2000, is actively promoting Qatar as a tourist destination, by organizing various festivities and taking part in various international tourism marts.

Transport and Communications:

This sector contributed QR 2,360 million to the overall GDP in 2003, and witnessed a growth of 4.9%. Qatar Airways is the principal airline operating from Qatar, designated as the “National Carrier”, and is a joint public and private sector enterprise (being 50% owned by the Government). It currently flies to over 46 destinations in the Middle East, North Africa, Europe, the Indian sub-continent and the Far East. Gulf Air is another major airline operating from Qatar and is owned by Oman, Bahrain and the Emirate of Abu Dhabi.
In June 2003, Qatar Airways signed a $5.1 billion agreement with Airbus Industry to purchase 32 aircraft, which will in the following five years raise their fleet size to 56 aircraft. In 2004, Qatar Airways will receive delivery of 13 new Airbus aircraft, taking its fleet size from the current 25 to 38 by year-end.
Qatar Telecom (Q-Tel) under license, is currently the sole telecommunications service provider in Qatar. Rapid growth in wireless communications has seen Q-Tel’s GSM subscriber numbers rise by 41% in 2003 to reach 376,535 translating into a 58% penetration level, one of the highest in the region.

Electricity and Water:

The Electricity and Water sector witnessed a marginal growth of 0.5% in 2003, contributing QR 980 million to Qatar’s overall GDP. Most of Qatar’s electricity generation capacity comprises of gas turbines, which are fuelled by natural gas. Water desalination is achieved in tandem with electricity generation. Ras Abu Fontas-B Plant, Qatar’s largest power and water desalination plant, entered operation in 1996 and provided installed capacity of 610 megawatts. The completion of the Phase 1 expansion at Ras Abu Fontas-B has seen an addition of 380 MW to Qatar’s power grid. Phase 2 of the expansion will see the addition of 27-30 million gallons a day of desalination capacity.
A number of industrial companies, such as QAPCO and QAFCO, have their own electricity generating facilities. Qatar’s first independent water and power project (IWPP), is set to come up at Ras Laffan in 2004, and is estimated to produce 750 MW of power and 40 million gallons of water a day.

Agriculture and Fisheries:

The Agriculture and Fishing sector has traditionally played only a minor role in the modern Qatari economy because of unsuitable weather and environmental conditions. Cultivable land accounts for only approximately 0.7% of Qatar’s total surface area. This sector grew by 2.0% in 2003, contributing QR 260 million to Qatar’s GDP.

 

Source: Qatar Economic Review 2004, Qatar National Bank