Qatar Economy and Qatar Exchange
Qatar Economy
Over the past several years, the financial crisis affecting the international market and economies has not affected the economy of Qatar. The economy of Qatar has remained stable with respect to growth and development. The stability of the nation’s economy is attributed to different factors. The first influence of economic stability in Qatar is the increased production of natural resources in the form of oil and gas. These two resources contribute approximately above three fifth of the country’s GDP. The increased production of the natural resource put Qatar at the same level with countries experiencing higher per capita income. As reflected in the figure 1, by 2010, Qatar had the highest GDP than all the countries in context .
As reflected in the figure 2, the nominal GDP and real growth of the country had been on the rise with exception of 2009. This exception is because of the financial crisis. In order to revive the economy, the government of Qatar adopted measures aimed at protecting internal banking system. The following year was boosted by enhanced oil and gas prices in the international market. Despite the fact that fluctuations are common in economic growth, most future economic growth of Qatar for the next five years is projected at 10% . There is a possibility of improvement in years after the five years to 7% economic growth .
The main objective of the Qatar’s economic policy is building on non-associated gas reserves. The country also plans to improve the degree of private and external investments. These investments focus on non-energy department. The country also plans to host the 2022 world cup in order to boost the GDP and economy of Qatar. In order to realize this objective, the country has plans to enhance large-scale infrastructures such as Qatar-Bahrain causeway . Within the economy, Qatar Central Bank controls all the monetary related policies. This involves determining money supply in relation to the existing demand for money. This act by the central bank influences the interest rates. The monetary related policies in Qatar are reflected on the conversion rate of US dollar. Qatar’s currency is known as the Qatari riyal (QR). Its conversion rate in relation to the U.S dollar is estimated at QR 3.64 against one dollar . Inflation rate, money supply growth, and economic growth are greatly related within an economy. Faster growth in money supply results in to extreme cases of inflation. Slow growth of money supply contributes towards stagnant economic growth. As reflected in the graph below, inflation rate in Qatar has registered high and low points over the seven years. Variation in inflation rate is down to economic as well as financial crisis within and outside the country .
Political stability in Qatar ranks higher than any other country’s within the Middle East region and the GCC (Gulf Cooperation Council) nations. The political, social, and economic relationship between Qatar and the rest of the global countries is healthy and stable. This creates much room for economic growth and development since there is increased business transaction in the international level.
Qatar Exchange
The Qatar Exchange was launched on 26th May, 1997. During this launch, seventeen companies registered and took part in the operations. The total volume of transactions within the initial exchange was approximated to be close to QR 6 billion. At the start, transactions were conducted manually. This was later replaced with electronic transaction after short duration of the semi-electronic era. Citizens of the nation were the only allowed participants in the Qatar Exchange through trading stocks within the stock exchange market. However, following recent legislations, members of GCC are allowed to conduct business in the Qatar Exchange adding up to 25% of the total volume. Non-citizens are also allowed to invest in the recently formulated companies. These companies include telecommunication and Al-Salam international companies found in Qatar. There is future perspective that the government would further permit increased involvement of the non-citizens in the stock market to boost the economic development of Qatar.
The Qatar Exchange consists of four segments. These segments include insurance, industrial, bank, and service segments.
As represented in the above pie chart, bank second largest segment. The bank segment or sector controls a market share of 27%. The components of bank sector considered as main players include Qatar National Bank, Qatar Islamic Bank, Commercial Bank of Qatar, Doha Bank, Al Ahli Bank QSC, Qatar International Islamic Bank, Masraf Al Rayan, and Al Khalij Commercial Bank. The share of the major players within the bank sector is illustrated below
Service sector or segment comes out as the critical sector within the economy of the country. The major role of the service sector is ensuring satisfactions of consumers within the economy based on their needs and wants. The goal of the service sector is to achieve the well-being of the society. The sector falls under the category of the fast growing sectors within the economy of Qatar. Example of service sector within Qatar is Telecommunication.
Huge potions of the service sector are illustrated in the pie chart below .
Qatar’s economy is a good investment area because of the political stability experienced within the territories and across the borders. The rate at which supply of money grows also supplements faster economic growth, which is essential for investment. Since Qatar’s economy does not register frequent fluctuations, it is ideal for investment. Potential investors would be pleased with the stable economic condition in Qatar. The unit of exchange is also strong in relation to the strength of the dollar. This makes investment to be of great value, hence favorable for investment.
References
STATE OF QATAR. Retrieved from
http://www.gulfbase.com/GCC/Index/6?pageID=99
QATAR SOURCE OF MONETARY POLICIES. Retrieved From http://www.qcb.gov.qa/English/PolicyFrameWork/MonetaryPolicy/Pages/MonetaryPolicyGoals.aspx
QATAR’S INFLATION RATES. Retrieved From,
http://www.gulfbase.com/site/interface/thegcc/gcc.aspx?c=qatar
QATAR FOCUS ON NON-ENERGY SECTOR. Retrieved From
http://www.theodora.com/wfbcurrent/qatar/qatar_economy.html
REBOUNDING OF QATAR GDP IN 2010. Retrieved From
http://www.theodora.com/wfbcurrent/qatar/qatar_economy.html
Figure 1 http://www.alphadinar.com/2010/01/31/qatar-positive-outlook/
Figure 2 http://www.marcopolis.net/qatar-economic-report.htm
QATAR’S GROWTH RATE. Retrieved From
http://www.qia.qa/QIA/about.html
