Qatar said it had halved its forecasts for economic growth in 2015.
Growth expectations were slashed to 3.7 per cent from the 7.3 per cent forecast in June. But the government’s biannual outlook said the country would record a fiscal surplus this year of 1.7 per cent of GDP, a figure above the 1.4 per cent it projected in June.
“On the fiscal side, the government is taking measures to rationalise expenditure. Still, markedly lower hydrocarbon revenue will narrow the surplus this year and is expected to lead to a modest deficit next year of about 4.8 per cent of GDP,” the Development Planning and Statistics Minister, Saleh Al Nabiy, said in a ministry report.
He said a continued mismatch in oil market supply and demand could prompt a larger adjustment in government spending plans, but an anticipated pick-up in oil prices and continued spending restraint could make Qatar’s deficit begin to retreat in 2017.
Qatar’s upcoming budget is being scrutinised for the impact lower hydrocarbon prices will have on state spending as the country prepares for the 2022 Fifa World Cup.
It will also be Qatar’s first new budget in almost two years, after it shifted its fiscal year to December 31 from March 31 earlier this year.
Oil prices remain a serious risk to the outlook for Qatar’s economy.
The ministry based its forecasts on oil priced per barrel at US$52.40 this year, $51.20 next year and $55.30 in 2017, according to the report. This is down, respectively, from $56, $61.60 and $65.60 used in the June report.
“The explanation for the slower [2015] GDP growth lies entirely in the performance of the oil and gas sector,” the ministry report said, adding that crude oil output this year was expected to be about 6 per cent below last year’s levels.
Real GDP growth is expected to increase to 4.3 per cent next year before tapering to 3.9 per cent in 2017, as benefits from increased gas and condensate production are offset by a slowdown in construction and the inflow of migrant workers as infrastructure spending peaks.
The chances of divergent monetary policies further complicate the outlook, the ministry said, noting the impending rise in interest rates in the United States for the first time in almost a decade.
Qatar pegs its currency to the US dollar, which should mean it mirrors American rate decisions.
However, Qatar’s central bank governor said in October that he saw no reason to imitate any US rate hike because of positive liquidity conditions in the Qatari banking system.
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COMPANY%20PROFILE
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The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Afghanistan fixtures
- v Australia, today
- v Sri Lanka, Tuesday
- v New Zealand, Saturday,
- v South Africa, June 15
- v England, June 18
- v India, June 22
- v Bangladesh, June 24
- v Pakistan, June 29
- v West Indies, July 4
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THE LOWDOWN
Photograph
Rating: 4/5
Produced by: Poetic License Motion Pictures; RSVP Movies
Director: Ritesh Batra
Cast: Nawazuddin Siddiqui, Sanya Malhotra, Farrukh Jaffar, Deepak Chauhan, Vijay Raaz
Tips for taking the metro
- set out well ahead of time
- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines
- enter the right cabin. The train may be too busy to move between carriages once you're on
- don't carry too much luggage and tuck it under a seat to make room for fellow passengers
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Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Disability on screen
Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)
Rosewood and Transparent — heart issues
24: Legacy — PTSD;
Superstore and NCIS: New Orleans — wheelchair-bound
Taken and This Is Us — cancer
Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)
Grey’s Anatomy — prosthetic leg
Scorpion — obsessive compulsive disorder and anxiety
Switched at Birth — deafness
One Mississippi, Wentworth and Transparent — double mastectomy
Dragons — double amputee
The%20specs
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Abu Dhabi Sustainability Week
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
%E2%80%98White%20Elephant%E2%80%99
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KEY%20DATES%20IN%20AMAZON'S%20HISTORY
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DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
Company%20Profile
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