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Qatar: Industrial outlook

The foreign direct investment inflow into the industrial sector of Qatar reached approximately QR129bn, as per the update of May 2014. The figure constitutes 52 percent of the entire capital investment in the crucial sector during the period as reported by Al Sharq.

The flow of foreign direct investments to the industrial sector of Qatar picked up mainly because of the economic diversification strategy of the country. In keeping with the Qatar National Vision 2030, the country is focusing more and more on high-value services in the sector of hydrocarbons.

The hydrocarbon sector of Qatar is bringing in a substantial number of foreign direct investment in the private segment, as per the daily.

Industry pioneers anticipate substantial foreign direct investments in Qatar's manufacturing sector in the duration of mid-term through long-term. The small & medium enterprises (SMEs) sector is also expected to leapfrog in a major way, the sources said.

But the recently-released Qatar Economic Outlook 2014-15, noticed that Qatar's manufacturing sector is expected to grow, but not as rapidly as either construction or services, nor as robustly as in the recent past.

In the year 2014, its progress is seen moderating with reductions in refined products and fertilisers. With prices of global fertilisers falling, the opportunity cost of providing feedstock to the industry is growing. Other segments of manufacturing will expand but more gradually than in recent years as capacity of production has become tighter.

However, in the year 2015 growth is expected to make an even higher come back on the supported by a revival in output of petrochemicals and refined products, and as feedstock arrives from Barzan. Swelling demand by the construction industry in Qatar for metals and cement linked to the huge capital projects should bring in some foreign direct investment in renewed capacity, triggering manufacturing growth to bring back some of its earlier spurts.

The substantia driver of expansion in the non-oil and gas economy in the year 2013 was service activity, which increased by 14.5 percent.

Just by itself it added 5 percentage points of overall expansion. All service sub-sectors witnessed substantial growth during this phase

Finance and real estate expanded by 14.3 percent, mostly on increased lending to big infrastructure projects.

Transport and telecommunications grew by 9.7 percent, fuelled by Qatar Airways’ growth, increments to LNG transport capacity and strong growth in ICT.

In trade and hospitality, it was reported by the Qatar Tourism Authority reported that mean hotel occupancy rates shot up from 58 percent in 2012 Q3 to a good 64 percent one year later.

Output in construction gathered thrust in the year 2013, to arrive at 13.6 percent and added 1.5 percentage points of total growth. Activity was mostly driven by Qatar’s substantial investments in infrastructure and real estate. This was the industry outlook of Qatar.

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