Qatar Targets 4% Annual Non-Hydrocarbon Growth, 85% LNG Boost by 2030

Qatar has set an ambitious target of achieving 4% annual growth in its non-hydrocarbons sector through 2030, focusing on key areas such as logistics, ICT, manufacturing, and tourism. Finance Minister Ali bin Ahmed al-Kuwari outlined these plans as part of Qatar's National Vision 2030 manifesto, which aims to diversify the nation's economy and reduce its reliance on hydrocarbons.

Why this matters: Qatar's economic diversification efforts have significant implications for the global energy market and the country's future economic stability. A successful transition to a more diversified economy could serve as a model for other oil-dependent nations in the region.

In addition to boosting non-hydrocarbon sectors, Qatar also intends to increase its liquefied natural gas (LNG) production by a staggering 85% to reach 142 million tonnes per annum by 2030. Al-Kuwari emphasized the importance of LNG as a transitional energy source, stating, "We believe LNG will be a transit energy for a long time. And this is going to help us to bring in the funds to invest in our Vision 2030 and future generations."

Qatar's economic growth has normalized in 2023 following the FIFA World Cup-driven boom, with the International Monetary Fund (IMF) projecting medium-term growth to increase to around 5% per annum, supported by the LNG production expansion. The IMF expects Qatar's economic outlook to remain favorable, with output expanding by about 1.75% per annum during 2023-25 and the non-hydrocarbon sector growing at 2.75% driven by domestic demand.

The IMF report also highlights that inflation in Qatar is likely to moderate to 2% this year, while fiscal and current accounts are projected to remain in surplus over the medium term. The IMF commended Qatar's broad fiscal discipline amid sizeable hydrocarbon windfalls in 2022-23, which has significantly strengthened its fiscal position. The Qatar Central Bank has successfully maintained price and financial stability, and the country's banks remain healthy despite an increase in non-performing loans.

As part of its diversification efforts, Qatar's sovereign wealth fund will continue to diversify its investments, focusing on emerging markets like Central Asia and Africa. The fund has already invested in Ardian Semiconductor, a French investment house that oversees or advises on $164 billion of assets.

Qatar's Prime Minister Mohammed bin Abdulrahman Al-Thani stressed the need for Gulf countries to unify their economic growth plans to face rising geopolitical risks, suggesting that GCC countries should coordinate their efforts in areas like artificial intelligence and semiconductors. This call for regional cooperation comes as Gulf countries plan to introduce a GCC-wide visa that would allow residents and visitors to travel to all the bloc's countries.

Qatar's ambitious targets for non-hydrocarbon growth and LNG production expansion demonstrate the country's commitment to economic diversification and sustainable development. With a focus on key sectors, regional cooperation, and strategic investments, Qatar is positioning itself for a prosperous future beyond the World Cup spotlight. As Al-Kuwari noted, "Beyond 2022, we continue our journey and focus more on economic diversification, enabling the private sector, changing the policies [for the] ease of doing business."

Key Takeaways

• Qatar targets 4% annual growth in non-hydrocarbons sector through 2030.
• LNG production to increase by 85% to 142 million tonnes per annum by 2030.
• IMF projects Qatar's medium-term growth to increase to around 5% per annum.
• Qatar's sovereign wealth fund to diversify investments in emerging markets.
• Qatar calls for GCC cooperation in areas like AI and semiconductors.