It has been more than four months since the start of the illegal siege of Qatar by its neighbouring countries.

However, the country has time and again proven that it has the ability to rise above adversities and continue to do well.

Further proof for the same came out when Qatar National Bank (QNB) recognised the country’s economy as one of the strongest in the Middle East and North Africa (Mena) region, despite the ongoing blockade, reported Gulf Times.

QNB said hydrocarbon exports have continued uninterrupted, new trade routes have been established, and the authorities are eager to attain a higher degree of economic self-sufficiency.

While the blockade initially disrupted some economic activity, its impact has dissipated, the report said.

“Over the medium-term, we expect the Qatari economy will prove resilient. Domestic industries will benefit from increased self-reliance while the governments plans to expand liquefied natural gas (LNG) production and a renewed drive to attract international tourists will drive future growth,” The Peninsula quoted the report as saying.

The report noted that the blockade impacted two main sectors of the economy — trade and banking.

While imports declined in the immediate period after the siege, latest data reveals that things are back to normal. This has been possible thanks to the opening of Hamad Port as well as new shipping routes to various countries.

In the banking sector, some deposit outflows were noticed immediately after the implementation of the siege. However, the impact on banks’ balance sheets was mitigated by liquidity injections by the Qatar Central Bank and increased public sector deposits.

Overall, the banking sector remains resilient with high asset quality and strong capitalisation.

Meanwhile, Qatar Tribune reported that the Qatari government remained comfortably resourced with over 250% of GDP still available in public assets. 

Compared to the other countries in the region, Qatar ranks second behind Kuwait in terms of total net foreign assets as a percentage of GDP, giving it one of the strongest balance sheets among its peers. 

Hence, the shock of the blockade is fading in the short term, said the QNB report.

In the medium-term, QNB expects the blockade to actually be positive for Qatar as certain domestic industries are set to benefit from the trade vacuum created by the blockade. 

“For example, a number of private sector initiatives to make Qatar more self-dependent in food production have been launched, such as large-scale dairy and poultry farms. Local production of other goods is also likely to be encouraged by the blockade and by government support in response to the blockade.

“Transportation and logistics firms will gradually benefit through an increase in trade volumes arriving directly in Qatar at the new Hamad Port,” QNB said.
Also, the country has started a renewed push at attracting travellers and tourists from all around the world. Visa restrictions have been lifted and new hotels and other tourism projects have been launched.

But the most important factor supporting Qatar’s medium-term outlook is the government’s plans to expand LNG production.

To ensure new mega production is brought online in five to seven years time, the authorities will need to initiate this construction in the near future.

This would have important spillover effects into the rest of the economy, drawing in foreign workers, which in turn, would raise demand for housing, goods, and services. In short, a boost in gas production would likely herald a new phase in Qatar’s economic development.