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Qatar is set to award US$30bn worth of contracts in 2016, according to a new report by Samba Financial Group
In its latest Qatar report, the firm said that it expected the rest of 2015 and 2016 to be busy with project activity and added that with US$30bn to be awarded this year, Samba Financial Group expects a similar amount to be spent next year, as the country accelerates its preparations for the FIFA World Cup, which will see US$135bn worth of contracts awarded in Qatar between 2015-2020.
“The government’s investment programme will be one of the key determinants of economic performance over the medium-term. Although there is evidence that the authorities have scaled down certain projects in the light of the sustained fall in the oil price, crucially we expect most of the planned investment will go ahead,” the report revealed.
“The scale of investment relating to the size of the country and the looming deadline of the 2022 World Cup are challenging. But the authorities are well aware of the issues including the risks of overheating, over-spending and poor yielding investments, and are looking to set up appropriate timelines and management processes,” it added.
The report said that Qatar’s economy expanded by 4.1 per cent in Q1 2015 on the back of strong growth in the non-hydrocarbon sector.
However, there are slight concerns about the banking sector, with liquidity said to be tightening as robust double-digit credit growth has not been matched by deposit growth which is being curtailed by falling public sector deposits.
“This is worth monitoring, but we believe that the authorities have ample resources to address any liquidity and funding issues, although public sector projects may take priority over private sector lending,” the report noted.