Chronicle of the Middle East and North Africa

Economy of Qatar

While the Qatari economy has recovered well from the COVID-19 pandemic, and has gained importance as a global energy supplier, its continuing dependence on oil and gas, and foreign labour, remains a challenge for the future. Sound government policies, including Vision 2030, are set to build a sustainable economy.

Economy of Qatar
The skyline of Qatar’s capital Doha during a heavy dust storm as construction workers stand at a site, May 17, 2022. KARIM JAAFAR / AFP

Author: Ali Noureddine
Edited by: Erik Prins


Qatar had transformed significantly since the mid-1900s when it was a British protectorate relying on pearl fishing. It has now emerged as one of the largest gas and oil-producing economies. Presently, Qatar boasts one of the most prosperous economies in the Middle East and North Africa (MENA) region. In 2021, according to World Bank data, Qatar ranked fourth globally and the first in the Arab world in terms of GDP per capita.

Despite various efforts to diversify Qatar’s economy, data from Qatar’s Ministry of Finance for the first quarter of 2023 reveal that over 92.4 per cent of the country’s revenues still come from oil and gas production. Additionally, per the Planning and Statistics Authority’s figures for 2022, this sector contributes approximately 41 per cent to Qatar’s GDP.

In a broader context, according to statistics from, Qatar currently possesses the world’s third-largest proven gas reserves, ranking behind Russia and Iran, with a total volume of approximately 24.7 trillion cubic metres. Qatar is increasingly focused on expanding its liquefied natural gas (LNG) production, directing additional investments towards establishing new liquefaction facilities and expanding the North Field. This expansion is expected to raise Qatar’s annual LNG production capacity from 81.2 million tons in 2023 to around 126 million tons by 2026.

In 2022, the Qatari general budget experienced significant gains due to increased gas prices because of the war in Ukraine and the disruption of Russian gas supplies to Europe. According to data from Qatar’s Ministry of Finance, the budget recorded a surplus of approximately $23.7 billion in 2022. This marked a remarkable increase of 5,462 per cent compared to the surplus in 2021, which was only $426 million.

Furthermore, Qatar’s economy benefitted from hosting the World Cup in 2022. Qatar anticipated direct and future revenues of approximately $17 billion from this event, as estimated by Nasser al-Khater, the CEO of the FIFA World Cup Qatar 2022. According to assessments by Qatari Diar, the real estate investment arm of the Qatar Investment Authority, Qatar had invested over $200 billion in preparation for the World Cup. These investments were directed to the construction of the Doha Metro, Lusail City, the expansion of Doha International Airport, the development of Hamad Port, the revitalisation of Downtown Doha, and the establishment of free economic zones.

These substantial investments were aligned with the long-term Qatar vision 2030. This vision aims to enhance Qatar’s infrastructure and position the country as a significant global political destination in the years to come.

From the COVID-19 Crisis to a Prominent Energy Hub

In 2020, Qatar suffered a rapid and sudden decline in global gas and oil prices due to the outbreak of the COVID-19 pandemic and the subsequent economic restrictions imposed upon major economies.

Consequently, Qatar’s economy contracted by 3.6 per cent that year, causing the GDP at current prices to decrease from $176.37 billion in 2019 to $144.41 billion in 2020. However, the Qatari economy rebounded in 2021, with the International Monetary Fund (IMF) estimating a growth rate of 1.6 per cent. This recovery was attributed to the gradual improvement in energy prices as pandemic-related restrictions were eased.

A year later, Qatar’s GDP experienced a significant increase. This growth was driven by the effects of the war in Ukraine, which led to a surge in LNG prices and increased demand for it.

Since the start of the war in Ukraine, European countries have turned their attention to Qatari LNG as a replacement for Russian gas, which has been disrupted. China has also become interested in Qatari LNG due to its increasing energy needs following the abandonment of its zero-Covid policy and easing restrictions on its industrial sectors. Consequently, Qatar experienced a surge in demand for its LNG production between 2022 and 2023, leading to a series of substantial deals signed by QatarEnergy.

In October 2022, QatarEnergy signed an agreement with ConocoPhillips to supply LNG to Germany for 15 years, starting in 2026. This deal followed shortly after QatarEnergy secured another contract to supply LNG to Sinopec, a Chinese company, for 27 years.

These two agreements are expected to secure sales from North Field production, as Qatar has been undertaking expansion efforts since 2021. Upon completing the North Field expansion project in 2027, Qatar anticipates increasing its annual LNG production by approximately 49 million tons. This expansion project represents the largest-ever investment in the LNG sector globally.

Furthermore, TotalEnergies entered the competition to benefit from Qatari gas resources. In September 2022, Qatar selected TotalEnergies as a partner to expand the southern part of the North Field, with a 9.375 per cent stake. This came after TotalEnergies obtained a 6.25 per cent share in the expansion of the eastern part of the North Field in June 2022 under a contract valid until 2054. TotalEnergies has thus become a strategic partner for Qatar in the extraction and production of liquefied gas.

Shell also joined the race for Qatari gas by becoming a partner in the expansion of the southern part of the North Field, with a similar 9.375 per cent stake. It is worth noting that foreign companies can only hold up to 25 per cent of this expansion project, with QatarEnergy retaining the remaining share.

Thanks to these developments, Qatar boosted its LNG exports to 81.2 million tons in 2022, marking a 5.4 per cent increase compared to 2021. During the fourth quarter of 2022, Qatar’s oil and gas sales rose to $16.29 billion, compared to $12.28 billion in the same period of 2021, marking a 33 per cent increase. This significant boost in economic activity resulted in an economic growth rate of approximately 4.2 per cent for 2022, pushing the GDP to reach $225.48 billion.

This positioned Qatar as the world’s leading producer and seller of LNG. Qatari authorities aim to increase LNG production by 54 per cent by 2027 through long-term contracts that ensure future sales.

By the end of 2022, LNG constituted over 48 per cent of Qatar’s total petroleum exports, compared to 34 per cent for oil and 11 per cent for diesel, according to US Energy Information Administration data.


Over the past years, Qatar has maintained low inflation rates compared to the global average. According to data from the IMF, the annual inflation rate in Qatar at the end of 2022 remained below 5 per cent. This was notably lower than the global average of 8.8 per cent and MENA‘s average of 15 per cent.

While many global economies grappled with rising energy prices and resulting inflation, Qatar managed to mitigate some of the consequences of this crisis through substantial government support directed towards the energy sectors and public services. Qatar Central Bank also demonstrated its ability to raise interest rates swiftly and repeatedly during 2022 to manage inflation and align with the global rise in interest rates, particularly in the United States.

In addition, Qatar was able to bolster its foreign currency reserves by 13 per cent in 2022. This increase enabled the Central Bank to uphold a robust monetary stability approach, consistent with its long-standing policy of pegging the exchange rate of the Qatari riyal to the US dollar, a policy in place since 2001. This policy prevents abrupt price hikes in imported goods that can result from fluctuations in the local currency exchange rate, a situation often observed in countries grappling with monetary pressures.


Between 2015 and 2019, Qatar experienced a significant increase in its public debt and debt-to-GDP ratio due to low oil and gas prices in the global markets. The diplomatic crisis with its neighbours and the subsequent blockade in 2017 also had further economic impacts.

In 2020, the outbreak of the COVID-19 pandemic and a rapid drop in oil and gas prices added more pressure to Qatar’s general budget. This resulted in a substantial rise in the debt-to-GDP ratio, which reached 72.6 per cent, compared to 35.5 per cent five years prior, as reported by the IMF. This represented an increase of approximately 104 per cent in the debt-to-GDP ratio over that period.

However, in 2021, Qatar’s public debt took a different trajectory. The Qatari general budget benefited from improved energy prices as global markets reopened and Qatar began resolving disputes with neighbouring countries. Since the first quarter of 2022, the general budget further benefitted from increased LNG prices and demand.

As a result, the debt-to-GDP ratio started to decline from 72.6 per cent in 2020 to 45.5 per cent in 2023, marking a decrease of 37 per cent over these three years. According to Qatar’s Minister of Finance Ali bin Ahmed al-Kuwari, the surplus in the general budget of 2023, estimated at 29 billion Qatari riyals ($7.73 billion), will further reduce the country’s public debt.

Global Competitiveness and Economic Performance

Qatar made considerable progress in the IMD’s World Competitiveness Booklet, moving from 18th place in 2022 to 12th place in 2023.

This ranking is based on an evaluation of 336 criteria and indicators used to assess the competitiveness and performance of local economies across 64 countries. The evaluation incorporates surveys from mid- and upper-level managers and business executives, who provide insights into the business and economic environment and local regulations and laws.

In the assessment, Qatar excelled in several key areas. It achieved a fifth-place ranking in economic performance, fourth place in government efficiency, and 12th place in business efficiency. Regarding infrastructure, Qatar ranked 33rd.

This advancement in the overall ranking was attributed to improvements in various indicators, including low unemployment rate, consistent population growth, and low income and consumption taxes.

Furthermore, according to the Executive Opinion Survey in 2023, Qatar continued to excel in areas such as the adaptability of government policy to economic changes, government subsidies, central bank policy, quality of banking and financial services, quality of air transportation, use of big data and analytics, and environmental laws that do not hinder business competitiveness. Additionally, Qatar maintained competitive electricity costs for industrial clients.

Dominance of the Gas And Oil Sector

The Qatari economy remains heavily reliant on gas and oil extraction, which saw a 43 per cent growth in the last quarter of 2022 compared to 2021, contributing 41 per cent to the GDP.

In the same year, the real estate sector’s contribution to GDP increased by 18 per cent, while construction activities increased by 9 per cent, resulting in construction and real estate jointly making up around 17 per cent of GDP (12 per cent for construction and 5 per cent for real estate). This surge was driven by preparations for the World Cup, including infrastructure expansion and real estate investment.

Qatar has made significant strides in developing its manufacturing sector, accounting for approximately 8.5 per cent of GDP today. This growth is attributed to the expansion of the food industry following the blockade of Qatar.

During the blockade, the government focused on supporting the food industry to enhance food security. As a result, after the first two years of the blockade, self-sufficiency in dairy and cheese production increased from 27 per cent to 106 per cent, and poultry production increased from 49 per cent to 123 per cent. During this period, investment in the food industry sector also surged by around 126 per cent.

Qatar’s competitive edge in petrochemical industries, supported by its gas and oil reserves and financial resources, further bolstered the manufacturing sector. Key areas of expertise include polymers, plastics, olefins, polyethene, and others.

Nevertheless, the composition of Qatar’s GDP demonstrates that the substantial economic diversification envisioned by the authorities many years ago has not yet been realised. Developing significant alternative production sectors remains a challenge. Meanwhile, the expansion of the petrochemical sector continues to be closely linked to the oil and gas supply chains.

Source: Statista

Qatar National Vision 2030

The Qatar National Vision 2030 is the cornerstone of the country’s economic and social development strategy, shaping its various sectoral plans. The vision aims at “transforming Qatar into an advanced society capable of achieving sustainable development and securing a high standard of living for its people for generations to come.”

To realise this ambitious objective, the vision addresses five key challenges, emphasising the need for balance in each:

– Balance in the development pace and the size and quality of the necessary expatriate labour force. In the upcoming years, Qatar will have to carefully assess the quantity and calibre of suitable labour, striking a delicate equilibrium between the costs associated with safeguarding the rights and requirements of this labour force and its influence on the societal structure and national identity on the one hand, and the economic advantages of attracting foreign labour on the other hand.

– Balancing between targeted growth and uncontrolled expansion. The vision aims to pursue controlled growth rates that align with the economy’s capacity for sustainable expansion, while steering clear of unchecked expansion.

– Balancing between the needs of the current generation and the needs of the future generations: The vision strives to uphold the principles of sustainable development, safeguarding future generations from the consequences of depleting petroleum resources. This will be achieved through economic diversification and setting aside a portion of oil revenues as a strategic investment reserve.

– Balancing between modernisation and preserving traditions. The vision also acknowledges the potential conflict between modern work methods, competitive pressures, traditional relationships and conservative lifestyles. In response, it seeks to strike a balance between contemporary lifestyles and the values and culture of the local community.

– Balancing between economic growth, social development, and environmental management.

Furthermore, the vision adheres to a fundamental principle of investing in environmentally friendly alternatives whenever environmental costs become evident in pursuing economic progress. Overall, it endeavours to shape public policies that mitigate the environmental impacts of rapid economic growth.

Labour Market and Unemployment

Qatar boasts exceptionally low unemployment rates, not exceeding 0.1 per cent in 2022. This achievement can be attributed to the ample availability of government jobs for citizens and a meticulous approach to hiring foreign workers based on the availability of job opportunities for Qataris in the private sector.

However, a notable gender disparity exists in these unemployment rates. In 2022, the unemployment rate among females was three times higher than that among males, underscoring the limited employment opportunities for women.

Data from the Planning and Statistics Authority (PSA) reveal that approximately 71.5 per cent of economically inactive individuals are females, while only 28.5 per cent are males. In contrast, females constitute just 27.3 per cent of the total population of citizens and residents in Qatar, as reported by the United Nations Population Division. It is worth noting that “economically inactive individuals” encompass all individuals who are not employed, whether by choice or due to a lack of job opportunities, which differs from the concept of “unemployment,” which is specific to those actively seeking job opportunities.

The Kafala System

In a significant move in 2020, Qatar abolished the Kafala system, which had previously required migrant workers to obtain permission from their employers to change jobs or leave the country. Qatar also became the first Middle Eastern country to implement a comprehensive minimum wage applicable to residents and citizens without discrimination.

These decisions received positive recognition from the International Labour Organization (ILO), which considered them a “historic move” that will give workers more freedom and employers more choice. However, while welcoming these reforms, Human Rights Watch emphasised the need for additional reforms in the Qatari labour market, including guaranteeing workers’ right to strike, and allowing them to form trade unions and renew residency permits without being dependent on their employers.

Source: World Bank/International Labour Organization

Labour Nationalisation Policies

Historically, Qatar has faced a challenge with citizens’ limited participation in the private sector, with over 83 per cent of citizens employed in public sector positions, according to data from the General Retirement and Social Insurance Authority (GRSIA). According to the PSA, Qataris comprise only 5.8 per cent of the total economically active population in the public and private sectors despite constituting approximately 11 per cent of the country’s total population.

In response, Qatari authorities implemented a ‘Qatarization’ policy as part of the Qatar National Vision 2030. This policy aims to provide 50 per cent or more of Qatari citizens with “meaningful permanent employment”.

As part of this initiative, the Qatari government in mid-2020 approved a decision to raise the percentage of Qataris in (partly) state-owned independent companies and those subject to the Retirement and Pensions Law to 60 per cent of total employees, with a target of reaching 80 per cent in the human resources departments of these companies.

In February 2023, the government approved a draft law on nationalising private sector jobs. Pending approval by the Shura Council, this law will grant the Council of Ministers, upon the Labour Minister’s recommendation, the authority to designate which jobs within each economic sector will be reserved exclusively for Qataris based on sector-specific nationalisation plans.

Figures from the Ministry of Labor indicate that the number of Qatari citizens who were employed in the private sector in 2022 witnessed a 4.7 fold increase, compared to 2021. This growth is attributed to various measures implemented as part of the Qatarization policy. This includes vocational guidance services, connecting Qatari job seekers with companies committed to the policy, and legislation that introduced guarantees for Qatari citizens, making the private sector more appealing for them.

Nevertheless, Qatar is expected to face significant long-term challenges in fully implementing the Qatarization policy due to the small number of citizens compared to the size of the local economy and its workforce requirements. Currently, 89 per cent of Qatar’s residents are non-citizens, who are necessary for the labour market and local economy. Non-Qatari workers still occupy 98 per cent of private sector jobs despite recent increases in the number of citizens working in this sector, according to figures from the PSA.

On the other hand, the Qatarization policy has started to yield results in developing local Qatari expertise within the labour market, albeit at a modest percentage of the total workforce. This growing local experience may open the doors for greater Qatari involvement in managing local economic sectors, reducing the reliance on foreign expertise.

Economic Repercussions of the Diplomatic Crisis (2017-2021)

Between 2017 and 2021, Qatar experienced economic challenges due to its diplomatic crisis with Saudi Arabia and its allies. This conflict resulted in a significant disruption of political and economic relations with these nations throughout this period. While the immediate effects of the crisis have subsided, its impact on the Qatari economy continues to be felt, particularly concerning trade routes and foreign trade.

Learn more about the repercussions of the Qatar blockade here:

Foreign Trade



Source: Qatar’s Planning and Statistics Authority

In 2023, Qatar’s foreign trade experienced a slowdown, with imports decreasing by 6.1 per cent and exports declining by 5.2 per cent in the first-quarter, compared to the same period in 2022. This resulted in a trade surplus decline from $19 billion in the first quarter of 2022 to $18.26 billion in the first quarter of 2023, marking a 3.8 per cent decrease, according to data from the PSA.

The reduced imports were primarily due to the conclusion of the World Cup held in Qatar in 2022, leading to decreased domestic consumption. Additionally, falling global oil prices influenced the decline in export volume.

Despite this slowdown, Qatar maintains a healthy trade surplus, equivalent to approximately 8.3 per cent of its GDP. However, a significant concern remains as 87 per cent of total exports rely heavily on petroleum commodities. This highlights the persistent issue of the local economy’s overdependence on oil and gas production. Other notable exports include plastics, fertilisers, aluminium, organic chemicals, and precious stones.

Machinery accounted for the largest share of imports at around 16 per cent, followed by electrical and electronic equipment at 8.5 per cent and vehicles at 6.6 per cent. Other notable imported goods included weapons, ammunition, metals, iron, and precious stones.

In 2022, China was the primary destination for Qatari exports, constituting approximately 16 per cent of the total, driven by high Chinese demand for Qatari gas and oil. India ranked second at 12 per cent, followed by South Korea at 11 per cent, Japan at 9.9 per cent, and the United Kingdom at 6.7 per cent. As for the largest importers to Qatar, they included China, the United States, India, Italy, Germany, and Turkey, collectively responsible for approximately 54 per cent of the goods imported by Qatar in 2022.

Building Spree

In the decade leading up to the World Cup, Qatar invested over $200 billion in infrastructure development, as reported by the Qatar Investment Authority. This expenditure was not solely directed towards the stadiums designated for hosting the tournament, but primarily focused on enhancing infrastructure quality, efficiency, and capacity.

One notable example is introducing a new metro system in Doha to alleviate traffic congestion. The system now boasts three lines and 37 stations connecting various parts of the capital. Additionally, Qatar replaced a quarter of its buses with electric ones and introduced a dedicated tram system in Lusail City and Education City. Hamad International Airport has expanded, increasing its annual passenger capacity to approximately 50 million and accommodating 1,300 daily flights.

Following the World Cup’s conclusion, Qatar has successfully completed its ambitious infrastructure projects. In the first quarter of 2023, the Public Works Authority announced the commencement of 22 new infrastructure and building projects, with a budget of $4.1 billion ($1.13 billion). These projects are set to complement the 10 ongoing projects, valued at approximately three billion Qatari riyals ($820 million). The Authority has further indicated its plans to initiate another set of projects in the third quarter of the same year, aligning with the goals outlined in the Qatar National Vision 2030.

In 2017, Qatar unveiled Hamad Port in the Umm al-Houl free economic zone, becoming the largest seaport in the Gulf region. This port is capable of hosting the world’s largest ships. According to Qatar’s Ministry of Transport, it includes substantial food storage capacity for strategic reserves, capable of sustaining three million people for two years. It also has the capacity to hold twice the local market’s import needs. Mwani Qatar anticipates that the port will substantially lower import and export expenses while expediting the nation’s international trade.

Furthermore, Qatar inaugurated Lusail City, situated north of Doha, covering an area of about 38 square kilometres. This new city encompasses 19 commercial, residential, and entertainment districts, four islands and 22 hotels with international star ratings. Qatar views this city as a promising tourist and entertainment destination, capable of accommodating 450,000 individuals, including visitors, residents, and employees. It promises to contribute to future growth in the tourism sector.

Qatar’s Foreign Investments

The Qatar Investment Authority (QIA) is Qatar’s primary sovereign fund, safeguarding financial surpluses from oil and gas exports. QIA has strategically diversified its investments across over 80 countries, spanning various economic sectors, including real estate, energy, industry, technology, stock markets, banking, tourism, sports, and clean energy.

As of the end of the first quarter in 2023, QIA’s investments reached $475 billion, compared to $461 billion during the same period in 2022. With this volume of investments, the Qatar Investment Authority is ranked ninth globally in asset size among other sovereign funds.

In recent years, QIA has embarked on a mission to diversify its investment portfolio, moving away from a primary focus on Western markets. This shift led to the establishing of a regional headquarters in Singapore in 2021, facilitating access to major companies and investors in Asian markets. In June 2023, QIA’s CEO, Mansour Ibrahim Al Mahmoud, announced that while the QIA would continue to invest in Europe, most of its investments would be directed towards China, India, and the United States, owing to the promising opportunities in these regions.

It is worth noting that not all QIA’s investments have achieved the expected success. For instance, in January 2023, QIA increased its stake in Credit Suisse shares to approximately 6.8 per cent, hoping for a revival of the Swiss bank’s business through its restructuring plan. However, after two months, the bank encountered liquidity problems again, leading Swiss authorities to mandate the sale of its shares to UBS Group AG at a significantly lower price than the market value. This resulted in losses of around $330 million for the Qatar Investment Authority, as estimated by Reuters.

Future Challenges

Qatar has benefitted from the recovery in energy prices during 2021 and 2022. It anticipates further gains in the future from the expansion of the North Field, increased production, and the sale of additional LNG as per existing contracts.

However, economic challenges remain for the emirate in the years ahead. One significant concern is the potential impact of a global financial crisis, which could exert pressure on energy market demand and prices, much like during the COVID-19 pandemic. This could potentially jeopardise Qatar’s economic growth and public finances, particularly considering the country had not reduced its heavy dependence on oil and gas until 2023.

Moreover, Qatar recognises that its natural resources will diminish over the coming decades, and there is an expected decrease in demand for these resources due to the global shift towards cleaner energy sources. If Qatar fails to develop alternative economic sectors, it risks jeopardising the prosperity the current generation enjoys for future generations. However, as of 2023, evidence from export figures, economic sector contributions to the domestic product, and general budget revenue sources indicate that Qatar has not adequately prepared itself for this challenge.

The Qatari economy will also grapple with challenges from its regional environment, marked by geopolitical tensions and security and military crises. Given the need for stable supply and export chains in the oil and gas sector, Qatar faces ongoing political risks that could threaten its energy sector investments.