Qatar’s GDP growth will exceed 6% this year in line with the International Monetary Fund’s projections, based on the "strong" performance of the non-hydrocarbon sector, a new report has shown.

According to Bank of America Merrill Lynch, Qatar’s GDP will grow 6.1% this year and 5% in 2013.

This year’s projected growth for Qatar is in alignment with IMF’s recent forecast of 6% GDP growth for the country in 2012 “driven by strong non-hydrocarbon growth”.

The BOAML report shows Qatar will outperform its Gulf neighbours on economic growth this year and in 2013.

The BOAML projected GDP growth rate in other five GCC countries this year and in 2013 are: Saudi Arabia (5%, 3.7%), Oman (3.3%, 3.3%), UAE (3%, 3.2%), Kuwait (3%, 3%) and Bahrain (2.4%, 2.9%).

Large infrastructure investment and increased production in the manufacturing sector will boost Qatar’s real non-hydrocarbon GDP growth, which will accelerate to 9%, the IMF had earlier said.

Qatar’s economic outlook for 2012 remains “positive” despite increased external risks, the IMF said as it projected a 9% growth for the country’s non-hydrocarbon sector next year.

Large infrastructure investment and increased production in the manufacturing sector will boost Qatar’s real non-hydrocarbon GDP growth, which will accelerate to 9%, the IMF said.

In May, the Bank of America Merrill Lynch held the view that Qatar’s GDP would grow at 3.3% in 2012, without citing reasons.

In its GCC economic forecast released yesterday, BOAML scaled down Qatar’s projected inflation based on consumer price index (in 2012) to 2%, from its earlier projection of 3%.

For 2013, the Bank of America Merrill Lynch forecasts slightly higher inflation at 3%, though significantly lower than the double-digit inflation seen a few years ago.
Rising rents were the main driver for inflation in Qatar, but that situation has clearly changed. Rents are under pressure because of excessive supplies in the market.

Recently, a leading market researcher said rental growth for the remainder of this year may be “limited” as a significant amount of apartments are scheduled to complete by the year end.

A report by leading property management company Asteco shows rental rates for offices “remained static” with no significant movement since the first quarter of the year.

However, continued supply through to 2013 will still outstrip improved demand especially from companies involved with infrastructure projects.

On the residential front, however, Asteco sees the situation “marginally improving” with demand for one and two-bedroom apartments across the city.

“If demand continues to grow at this pace, the market could acquire a healthy supply and demand balance particularly in the one- and two-bedroom category,” Asteco said.