IMF: Doha stronger than the Saudi block, but risk remains

For experts, the economic and financial impact of the stand-off between Qatar and Saudi Arabia is "weakening", but there are still factors of uncertainty. Liquidity flow and the intervention of the Central Bank offset the 40 billion dollar hole. The possible drop in hydrocarbon prices is worrying.

Doha (AsiaNews / Agencies) - The economic and financial impact of the more than nine month Saudi Arabian blockade on Doha "are weakening"; however, there are still "certain elements of risk" for the Gulf emirate. This is what the experts of the International Monetary Fund (IMF) say, according to which the Doha leaders have been able to open new avenues to trade and the growth indices remain always positive.

For months Qatar has been at the center of a serious political, diplomatic and economic crisis that pits it against the other Gulf countries, led by Riyadh. According to some, the clash between Qatar and Saudi Arabia originates from the ties between Doha and Tehran, the number one enemy of the Saudis in the region, and the supposed support for terrorist groups. In fact behind the controversy - which also involved the Qatar Al Jazeera satellite channel, which Riyadh wants shut down  - there would be a counterattack within Sunni Islam and, in particular, between Doha and Abu Dhabi.

An IMF report released in recent days shows that the effects of the economic blockade imposed by Saudi Arabia, United Arab Emirates, Bahrain and Egypt - which cut off all diplomatic and commercial relations with Doha last June – have been "transitory" . If, on the one hand, foreign financing and private deposits decreased by about 40 billion dollars, on the other hand the decline was offset by injections of liquidity by the Central Bank and the Qatar investment authority.

Like other Gulf nations that base their wealth on energy production, Qatar has suffered the backlash caused by the global collapse in oil and natural gas prices. This has imposed the introduction of austerity measures based to guarantee the state budget, in the face of a series of economic indicators that show a negative balance: in the non-hydrocarbons, 2017 showed a growth of 4%, down from at 5.6% of the previous year. Last year's Gross Domestic Product (GDP) stood at 2.1%, a slight decline compared to 2.2% in 2016. The budget deficit fell to 6.0% of GDP, compared to 9, 2% of the previous year.

The great crisis that was feared due to the blockade of the Gulf countries did not materialize, but according to IMF experts, elements of risk remain. The main ones, they explain, "concern the possibility of a fall in oil prices, the application of fiscal measures and the uncertainties linked to the persistence of the diplomatic controversy".

In the past, Qatar depended largely on imports from neighbouring Saudi Arabia for food stocks, including milk and other dairy products. Hence the need for 2.7 million inhabitants to find alternative sources for food supplies [read Turkey, Iran and Morocco], while strengthening domestic production.