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Satyendra Pathak
Doha
A combination of sharp increase in exports and contraction in imports resulted in Qatar achieving trade surplus of QR133.7 billion in 2017 compared to trade surplus of QR92.36 billion in 2016, Qatar Central Bank (QCB) has said in its latest annual report.
While exports grew by 17.8 percent to QR245.7 billion driven by hydrocarbon exports, the report said, imports declined by 3.7 percent to QR112 billion on an annual basis.
"The effort to diversify the economy by reducing the reliance on the hydrocarbon sector while sustaining the leading role of Qatar in the global natural gas market has remained," the report said.
With sustained recovery in energy prices, QCB said, the share of energy related exports in total exports increased to 84.2 percent during 2017 from 81.6 percent during 2016.
Because of this surge in hydrocarbon exports, total exports as a percentage of GDP increased to 40.3 percent during 2017 from 37.6 percent during 2016.
On the other hand, the report said, the overall deficit under non-merchandise heads in 2017 declined by 9.9 percent to QR110.3 billion from QR122.5 billion in 2016.
The reduction in the deficit under non-merchandise mainly followed decline in deficit in the services account by 16.2 percent to QR49.9 billion and in the income account by 62.2 percent to QR1.5 billion, the report said.
The reduction in deficit in the services account was solely due to increase in export of services by 16.7 percent to QR64.5 billion, as import of services remained flat at around QR114.4 billion.
With efforts made by the state government to diversify exports, the report said, transportation and travel services have rapidly shown a high growth over the last several years.
On the other hand, despite being a large importer of services related to FIFA world cup 2022 related projects, imports of services have been largely stable over the last three-four years.
"Deficit in the income account declined primarily as investment income of residents increased by a higher pace of 20.6 percent to QR31.2 billion than the increase in outflows of investment income of foreigners by 9.5 percent to QR32.2 billion," the report said.
With regard to deficit in the current transfer account, the report said,"Even though remittance outflows increased by 4.2 percent to QR63.6 billion, transfers from abroad also more than doubled to QR4.8 billion thereby keeping the deficit largely unchanged."
Direct investment head remained in net outflow and posted QR2.6 billion in 2017, the report said adding the residents invested QR6.2 billion in direct investment abroad while foreign investors invested QR3.6 billion in direct investment in Qatar during 2017.
This can be compared with 2016 when residents invested QR28.8 billion abroad while foreign investors re-invested QR2.8 billion inside Qatar, the report said.
Under 'portfolio investment', there was net capital inflow of QR33.5 billion during 2017, increasing from QR22.1 billion during 2016. However, the pattern was completely different from the previous year.
"During 2016, net inflows from foreigners' portfolio investment in Qatar exceeded residents' portfolio investment outflows abroad. By contrast, during 2017, the net inflows were due to residents' higher unwinding of portfolio investments abroad than foreigners' unwinding of portfolio investment in Qatar," it said.
As residents unwound their portfolio investments abroad during the second and the third quarter, the report said, there were inflows to the tune of QR41.6 billion, while foreigners unwound QR8.1 billion of their portfolio investments in Qatar.
