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Qatar will maintain a strong economic performance this year thanks to income from natural gas, and its riyal currency appears to be in line with economic fundamentals, the IMF said on Wednesday.

“The key challenges facing the authorities are to lower Qatar’s high rate of inflation, continue to shield the economy from the global financial crisis, ensure that rapid credit growth does not undermine bank soundness, and diversify the economy,” the International Monetary Fund said in a statement.

The Persian Gulf nation grew by 16 percent in 2008, thanks to expansion in oil and natural gas, but inflation was 15 percent amid rising food and rental costs, the IMF estimated in a regular assessment of the country’s economy.

It forecast growth to be at least as strong this year while inflation should fall, and it endorsed Qatar’s currency regime, which targets the dollar.

“Directors agreed that the peg to the U.S. dollar continues to provide a credible anchor for monetary policy and maintain external stability,” the IMF said. “They noted the (IMF) staff’s finding that the level of the Qatari riyal appears to be in line with economic fundamentals,” it added.

Reuters


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