Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 8/7/2017
Throughout 2016, the U.S.-Qatar political, commercial, economic and security relationship grew even stronger than before.  Qatar continues to be a resilient and diverse market despite regional unrest and some uncertainty in the global market, including the decline in energy prices.  With U.S. exports to Qatar growing to nearly $5 billion in 2016, U.S. companies performed well in the market with major awards in aviation, defense and infrastructure.  

Regional Political Disagreements.   On June 5, 2017, the governments of Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Libya, Yemen, and the Maldives all ceased diplomatic relations with the State of Qatar and severed most contacts.   Thus far, the impact has primarily been on regional travel, with Qatar Airways suspending flights to those countries and airlines from those countries (such as Emirates, Etihad, Saudia, Gulf Air) suspending flights to/from Qatar.  The movement of goods across land and sea borders has also been impacted.  Qatar has moved quickly to establish other sources of imports and continues that effort, which might present new opportunities for American suppliers.  

The U.S. Embassy in Doha and the U.S. Commercial Service are closely monitoring the situation and continue to provide guidance and support to U.S. companies wishing to enter the market as well as those already doing business in the country.  U.S. companies are encouraged to engage directly with their local Qatari partners, representatives, or agents to ensure business continuity and alternatives for sourcing and shipping of U.S. goods into Qatar.  For the most up-to-date information related to this situation, please reach out to the Commercial Service in Doha. 

Economic Growth.  In 2016, Qatar’s economy continued to grow, with a real GDP growth rate of 3.7% over the previous year despite fluctuating oil prices, regional unrest, and a growing budget deficit, estimated at 5.4% of GDP.  The economy is expected to see similar growth in 2017, with an eventual decrease in budget deficit in 2018.  Total government spending stood at $35 billion, with a majority of the awarded projects still focused on infrastructure and port development. 

Inflation:  In October 2016, inflation reached 2.2%, due to the increase in domestic energy costs. Inflation rate in January 2017 was 1.2%, the lowest it has been since January the previous year. The inflation rate is forecasted to reach 3.7% in the fourth quarter of 2017, culminating in 3.43% in 2020.  There is a risk however, that higher domestic demand could cause supply bottlenecks, pushing domestic inflation higher than baseline forecasts.

With an economy still largely depending on hydrocarbons, Qatar’s 2016 economic performance has been significantly affected by stagnant oil prices and a self-imposed moratorium on additional output from the giant North Field that was lifted in April 2017. This has also led to a shift from an account balance surplus of $13.8 billion in 2015 to a deficit of $8.3 billion in 2016 for the first time since 1998.  

The government has undertaken several key measures, such as lifting on the moratorium on the North Gas field in April 2017, issuing a record $9 billion Eurobond sale in the regional and international debt markets, and tighter monetary conditions aimed to control inflations.  Oil and Gas continues to constitute the largest sector contributor to GDP at 30.3%, followed by Finance, Insurance, and Real Estate which increased to 17.3%, Construction at 11.9%, Whole and Retail Trade at 10%, Manufacturing at 9%, Transport and Communications at 5%, and remaining 16.4% from other sectors. 

Diversifying from Oil and Gas.  The government has continued its focus on initiatives and efforts to diversify the economy and reduce spending on non-essential areas, under the plan known as Qatar National Vision for 2030.  Qatar’s infrastructure and transportation sector has been a key focus of spending, with focus on projects such as expanding Hamad International Airport, completing the first phase of the new Hamad Sea Port (April 2016), rolling out several roads and highways projects, and advancing works on phase 1 of the Doha Metro and Lusail Light Rail transit projects.  

Public Private Partnerships.  Qatar will host the 2022 soccer World Cup. With one stadium left to be awarded (Ras Abu Aboud, currently being reviewed for a PPP model), the remaining stadiums have all been awarded, and Khalifa International Stadium completed in May 2017.  The draft law for the Public Private Partnership (PPP) is expected to be finalized and passed in 2017, to help facilitate further investment in Qatar.  The Ministry of Economy and Commerce has led the efforts on the PPP law, along with a group of government agencies representing the different key sectors in the country. 

Robust Trade and Investment with the U.S.  The U.S. and Qatar’s trade and investment relationship remained robust in 2016 with total trade standing at $6 billion, and U.S. exports to Qatar totaling almost $5 billion.  2016 witnessed the second meeting of the government-to-government Economic and Investment Dialogue in Qatar, an annual forum for key decision makers to identify concrete steps to bolster U.S. and Qatari commercial and economic relations. 

At the last meeting of the Dialogue, the Qatar Investment Authority announced an additional commitment to invest $10 billion in the United States in infrastructure.  This was in addition to its existing commitment to allocate $35 billion in capital investments in the United States.

U.S. has a trade surplus with Qatar, recorded at $3.8 billion in 2016, an increase of $900 million from 2015. U.S. goods exports to Qatar in 2016 reached $4.9billion, an increase of 16.7% from the previous year.  Corresponding U.S. imports from Qatar, mostly oil and gas, stood at $1.2billion, a decrease of 14.2% over 2015.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

Qatar Trade Development and Promotion