Qatar ranked first among 50 of the world’s top destinations for foreign direct investment (FDI), as the Gulf state boasting a positive economic outlook for this year despite warnings of a looming recession.
The findings were published in a new report by fDi Intelligence titled “FDI Standouts Watchlist 2023”, which said that Qatar leads the top 10, followed by India and Morocco.
Offering a promising view on Qatar’s FDI this year, the report said Doha’s FDI recorded a 70% annual growth between 2019 and 2022, with a possible 2.4% increase in 2023. It noted that inflation is also not expected to surpass 3.3%.
The report listed the top FDI sectors as oil and gas, financial services, and software and information technology.
It noted that the energy crisis in light of the war in Ukraine, which saw European countries abandon reliance on Russian gas, strengthened Qatar’s role as a top exporter of liquified natural gas (LNG).
The mega North Field expansion project, the largest of its kind, will further strengthen Doha’s position as a LNG giant in the industry. The project is expected to increase Qatar’s LNG production capacity to 126 million tonnes per annum by 2027.
Last year saw the announcement of a number of international partnerships with Doha’s state-owned energy company QatarEnergy for the project. Some of the partners include Shell, ExxonMobil, ConocoPhillips, Eni and TotalEnergies.
The report added that Qatar also found “itself in the spotlight of the FIFA World Cup at a time when the local economy has plenty of wind in its sails.”
Qatar unlikely to be affected as IMF warns recession to hit third of world in 2023
“The country has achieved a 70% annual growth in FDI projects between 2019 and 2022, fDi Markets figures show, and its economy is now expected to grow by 2.4% in 2023, while inflation should not exceed 3.3%, according to IMF [international monetary fund] estimates,” the report added.
Overall in the Middle East and Central Asia region, the report expects the FDI to grow by 3.6% as Sub-Saharan Africa will see a 3.7% increase.
The positive economic forecasts come amid a bleak view offered by the IMF this week, warning that a third of the world is expected to go into a recession this year.
Explaining this year’s economic forecast, the IMF official said the reason behind the prediction is due to the simultaneous slowdown of the world’s three big economies – the United States, the European Union and China.
However, economists believe Qatar’s economy will continue to expand “at a healthy pace” despite a potentially slow GDP growth.
“Qatar’s economy will continue to expand at a healthy pace, although real GDP growth will slow from about 5.5% in 2022 to about 3.7% in 2023,” Adnane Allouaji, GCC economist, told Doha News.
Allouaji explained that Qatar benefitted last year from the hydrocarbons sector activity, most notably the LNG trade and investment.
“Qatar’s buoyant energy sector has allowed the country to rebuild its economic and financial buffers and these will remain vast in 2023. Qatar has been able to generate fiscal and current-account surpluses in 2021 and 2022, and both balances will remain solidly in surplus during 2023,” Allouaji noted.