The official also tapped into investments in Egypt and UBS.
Qatar’s economy is unlikely to be impacted by changes in global oil prices due to growth from its non-hydrocarbon sector, the Gulf state’s finance minister told Bloomberg on Wednesday.
“We are in good shape, because now the growth is coming from the non-hydrocarbon sector, so really we don’t care about the movement in the oil prices,” Qatar’s Minister of Finance Ali Al Kuwari said at the Qatar Economic Forum.
Commenting on the Gulf state’s economic growth, Al-Kuwari said Qatar performed “very well” last year and confirmed a 32% nominal gross domestic product (GDP) growth.
“Last year we did very well. The economy, the non-hydrocarbon sector grew at 6.7% versus hydrocarbon at 1.5%, the whole year growth 4.8%, 32% in nominal GDP, which is a record GDP, $240 million,” he explained.
Commenting on this year’s expectations, he said Qatar’s economy is still in good shape, citing analysis from the World Bank and international analysts.
“Inflation is under control, I mean last month we did 3.6% inflation is down. The whole year of last year is less than 5%,” he said.
In December, Qatar announced a 2023 budget surplus of QAR 29 billion (nearly $8 billion) with its revenue expected to increase by 16.3%. Qatar also boasted significant economic growth following the 2022 FIFA World Cup last year, the first to ever take place in an Arab and Muslim country.
Responding to a question on Qatar’s spending surplus, Al-Kuwari said Doha has “a disciplined fiscal policy framework” that decides how to manage it as well as the deficit.
“The surplus is divided between paying debt, enhancing the central bank reserves, as well as enhancing the capital of the Qatar Investment Authority,” he said, referring to Qatar’s sovereign wealth fund.
Asked about a tightness in liquidity, the Qatari minister rejected the idea that his country is facing the same pressures of inflation as seen in economies across the world.
“Qatar is not under pressure in terms of inflation like somewhere else. So we are doing it because purely as a monetary policy, just because we are back to the dollar when we have to follow. So we don’t get into the arbitrage business,” he said.
Meanwhile, with cash-strapped Egypt grappling with the impact of the ongoing war in Ukraine as well as increasing foreign debt, Cairo has sought investments from the oil-rich Gulf region.
Its foreign debt more than tripled in a decade, reaching $155 billion.
Responding to a question over Qatar’s investment plans in Egypt, Al Kuwari said Cairo has “great opportunities”.
Last year, Qatar and Egypt signed investment deals totaling $5 billion in a number of sectors. The minister said Doha is currently looking into investment opportunities, including ones in the manufacturing, tourism and telecommunications sectors.
“Egypt is very strong in manufacturing, very strong in tourism, telecommunications, so we’re looking at these sectors. We have been reviewing an inventory or options that came from our Egyptian friends,” he said.
When asked about providing aid with “no strings attached”, Al Kuwari said that its investment into Egypt is “purely commercial.”
“Just giving grants and charities I think is no longer the case with Qatar,” saying his country works with multilateral organisations to better allocate grants.
“We like to work with multilateral organisations like the IMF, the World Bank to work through their programmes, because they can administer these programmes better than we do.”
Separately, the current Credit Suisse turmoil remains an issue of concern worldwide following a tough banking year.
In March, the Swiss National Bank announced that UBS would buy Credit Suisse for $3.4 billion.
The Qatar Investment Authority, Doha’s sovereign wealth fund, had doubled its stakes in the Swiss bank in January in a move that made it the second-largest shareholder within the entity after the Saudi National Bank.
Asked about whether Doha would invest in UBS, Al Kuwari said that Qatar already has a stake in the Swiss bank that was increased “with the conversion of the Credit Suisse equity”.
He said that he had hoped that Credit Suisse had consulted its shareholders.
“The Credit Suisse actions, we have some opinions about it. Yes, we appreciate what the Swiss government was doing to safeguard the financial system and a big bank, but I think certain actions were not thought about properly, especially the existing shareholders.”