By Pratap John Chief Business Reporter http://www.zawya.com
Project spending trends in Qatar remains strong, says Standard Chartered Bank which estimates another QR40bn ($11bn) worth key infrastructure projects will be awarded in the country before the year-end.
The bank estimates project awards exceeding QR87bn ($24bn) in Qatar for 2013 as a whole.
“We expect private-sector growth dynamics to pick up significantly on the back of huge investments in infrastructure projects. We estimate that Qatar’s non-oil sector will grow by 12% in 2013,” StanChart said.
In May, one of the largest projects, the Doha Metro system – worth almost QR30bn ($8bn) was awarded. This was one of the most significant infrastructure projects to be funded in years, and signalled that the government is now shifting its focus to addressing the infrastructure requirements that form part of Doha’s long-term commitments to both FIFA 2022, which the country hosts, and Qatar National Vision (QNV) 2030.
One of the key challenges Qatar has faced over the last two years has been the slower-than-projected level of spending outlays, largely because spending undershot projections. But this is changing and Qatar is now rapidly implementing infrastructure projects.
StanChart says there are clear signs that policy makers are committed to backing wide-scale public-sector projects necessary to support Qatar’s economy in the long run.
“We look at three core themes that will be important to monitor for the remainder of this year. First, we consider what changed in 2013 in terms of spending dynamics, and what this signals. Second, we look at why Vision 2030 as well as FIFA 2022 will be key in driving policy. Third, we look at inflation, and assess how demographic dynamics driven by the current investment boom are increasing housing pressures,” StanChart said.
The bank estimates that almost 85% of the projects in the pipeline are directed towards implementing and delivering on QNV 2030 long-term targets rather than simply focusing on FIFA 2022.
Projects in the pipeline are wide-ranging, from schools, hospitals and other key social infrastructure projects to the Doha Metro and railway projects at an estimated total cost of QR131bn ($36bn). More info