Home / IMF commends Qatari economy but urges greater efficiency

IMF commends Qatari economy but urges greater efficiency

The International Monetary Fund (IMF) on Sept. 10, said that Qatar's economy was healthy and strong, but urged the country's government to make it stronger and more resilient.

The International Monetary Fund (IMF) on Sept. 10, said that Qatar's economy was healthy and strong, but urged the country's government to make it stronger and more resilient.

In its annual review of the Qatari economy, the IMF commended the tiny island in the Arabian Gulf on diversifying its economy, which contributed to sustainable levels of growth.

Qatar’s scarce oil resources and subdued economic growth, forced the emirate to reduce its high dependence on oil and redefine its development strategy since the mid-1990s.

Having the world’s largest natural gas reserves has helped the country, as have heavy investments to develop through joint ventures with foreign partners liquefied natural gas (LNG) exports and gas-intensive industries, such as petrochemicals and fertilizers, said the IMF.

In addition to Qatar’s continued investments to increase its crude oil capacity the emirate has expanded its diversification recently to include tourism and the development of small- and medium-size industries that use by products of the hydrocarbon production. The Fund, said this has contributed to "impressive economic performance," and improved education and health programs and enhanced infrastructures.

Qatar's economy grew 7.2 percent in 2001 despite of poor economic conditions globally, according to the IMF. Yet economic growth was well below the record 11.6 percent economic growth in 2000.

Even though, government's policies have contributed to external and fiscal surpluses, per capita income has risen rapidly, the IMF encouraged Qatar to take steps to further enhance the economy's resilience and efficiency and “to reduce the budget's dependence on oil receipts through the gradual introduction of a modern tax system, based on a range of taxes on consumption and profits, to replace and broaden existing sources of non-oil revenue.”

The IMF observed that Qatar’s Central Bank monetary policy has played an appropriately supportive role in the pursuit of price and exchange rate stability.

“The central bank has taken a number of steps to enhance its capacity to implement a market-based monetary policy, including the liberalization of interest rates and the simplification of reserve requirement,” said the Fund.

Qatar’s current fixed exchange rate regime and strong financial discipline, has been a beacon of stability and confidence, and remains appropriate in Qatar's circumstances, added the Fund.

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