Qatar’s economy dived by more than 23 per cent in the fourth quarter of 2008 but ended the year higher by a staggering 44 per cent because of a surge in oil prices and gas exports, official figures showed yesterday.

From QR83.2 billion (Dh84bn) in the third quarter, the Gulf country’s nominal gross domestic product (GDP) shrank to QR77.2bn in the last quarter, a quarterly decline of nearly 23.2 per cent.

But the GDP jumped by about 44 per cent through 2008 to peak at QR372.4bn compared with QR258.6bn in 2006, according to Qatar’s Government statistics authority. “The decline in the fourth quarter was a result of a sharp drop in oil prices of around 55 per cent… there was also a similar fall in condensates prices… despite the steady rise in LNG revenues, this sector was negatively affected by the condensates price fall as it receded by 8.3 per cent.”

The report showed the high growth in 2008 was a result of a surge in the oil and gas sector by around 56.8 per cent as crude prices averaged nearly $95 last year compared with $70 in 2007 and Qatar is pushing ahead with mega LNG projects to attain its output target of 77 million tonnes by 2012.

As for other sectors, construction grew by 5.2 per cent in the fourth quarter but raced by 24.1 per cent through 2008. Electricity and water fell by 2.3 per cent in the last quarter but jumped by 26 per cent during the year, while there was a growth of around 16.2 per cent in finance, insurance and real estate services.

Unlike other Gulf oil producers, Qatar’s economy is not expected to be affected by the global financial crisis this year as its GPD is projected to continue its big leaps in both nominal and real terms thanks to soaring LNG sales.

Forecasts by the International Monetary Fund showed Qatar’s real GDP would soar by 29 per cent in 2009 to become the world’s fastest growing economy. The Washington-based fund attributed this to a sharp rise in LNG exports this year.

“Qatar’s medium-term outlook is positive. Real GDP growth is projected at 29 per cent in 2009, as the production of LNG and gas products is expected to almost double with the commissioning by Rasgas of two trains, and construction, manufacturing, financial services, trade and transportation, and communications all projected to grow at a strong pace,” the IMF said in its latest review of Qatar.

It expected inflation in Qatar, the highest in the oil-rich Gulf, to fall to around 10 per cent in 2009 from 16 per cent in 2008, as a result of the “pass through of declining international prices for food and raw materials and a slower increase in domestic rents owing to a larger supply of low and middle-income housing”.

“The fiscal and external current accounts are projected to remain in surplus in 2009, despite the lower projected oil price of $54 a barrel… output growth is projected to average 12 per cent a year through 2013. Contributing factors include further increases in the production of LNG, gas-to-liquid (GTLs) and petrochemicals, and an expansion in financial services as the single financial market and integrated regulator is implemented.”

Qatar, which controls the world’s third largest recoverable gas resources after Russia and Iran, has recorded the highest growth rates in the Arab World over the past seven years mainly because of its surging LNG exports.

Massive LNG projects have already turned the tiny Opec member into the world’s largest LNG exporter after overtaking Indonesia last year. The rapid rise in its GDP has turned Qatar into one of the 10 wealthiest nations, with its per capita income exceeding $70,000 last year. Qatar Petroleum has approved a staggering QR222.7bn for its oil and gas development scheme during 2008-2012. The oil plan will lift production from its onshore and offshore fields from the current 860,000 bpd, to around 1,08 million bpd by the end of 2010.

Around QR104bn will be pumped into refining and gas-to-liquids projects, while the natural gas sector will receive nearly QR63bn. Allocations included QR25bn for industries, QR19.7bn for crude oil and around QR11bn for petrochemicals.

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