* Real GDP growth forecast raised to 4.8 pct from 4.5 pct
* Hydrocarbon output to fall less than originally thought
* Inflation now seen at 3.5 pct instead of 2.5 pct
* Infrastructure projects to boost housing costs
* But Qatar says can use regulation, liquidity to curb CPI
By Andrew Torchia
DUBAI, Dec 23 Qatar raised its forecast for
economic growth next year and said that while prices would rise
considerably as huge infrastructure-building plans gained speed,
it could contain inflation.
Gross domestic product, adjusted for inflation, is now
forecast to expand 4.8 percent in 2013 instead of the 4.5
percent which authorities predicted in June, the General
Secretariat for Development Planning said on Sunday.
That growth rate, down from an estimated 6.3 percent in
2012, would be Qatar's lowest since 2002, according to
International Monetary Fund data.
A period of heavy investment in Qatar's oil and gas
resources has ended, meaning it will move closer to the growth
rates of other Gulf Arab energy exporters, the planning
authority said in a statement.
But oil and gas output next year is likely to decline less
than originally thought, by 0.2 percent instead of 1.2 percent,
largely because of more crude oil production. Infrastructure
building will also accelerate, taking construction sector growth
to a double-digit rate, the authority said.
Qatar plans to spend tens of billions of dollars by 2020 on
railways, roads, utilities and facilities to host the 2022
soccer World Cup, but partly because of bureaucratic obstacles,
projects have started more slowly than businessmen had hoped.
The authority predicts Qatar's state budget spending next
year will climb 9.5 percent to 255.8 billion riyals ($70.3
billion); within that, capital spending would rise 10.4 percent
to 85.9 billion riyals.
Although Qatar is vulnerable to any downturn in oil prices,
the authority calculated the price of crude oil, now above $100
a barrel, would have to drop below $50 to shift its budget
surplus into a deficit next year.
It saw the main economic risk as geopolitical, an apparent
reference to Iran's threats to close the Strait of Hormuz in the
event of conflict over its disputed nuclear programme.
"Should geopolitics develop in a way that disrupts the free
flow of gas and oil, the financial resources available to the
state will be affected," the authority said, adding that in this
case Qatar could mobilise its reserves. Analysts estimate its
sovereign wealth fund has over $100 billion of assets.
While the infrastructure building scheme will keep Qatar's
economy growing, companies and workers pouring into the country
to handle the projects are likely to push up residential rents.
The authority now expects consumer price inflation to rise
to 3.5 percent in 2013 from 2.0 percent this year; in June, it
had predicted 2013 inflation of only 2.5 percent.
The rental component of the consumer price index bottomed
out in April-May this year and by August rents had climbed above
their year-ago level, adding about 0.5 percentage point to
inflation this year, the authority said.
It said officials could use a combination of regulation and
action by the central bank, which has been issuing Treasury
bills to absorb excess funds in the money market, to avert
overheating. "Inflation remains mild and is unlikely to present
a threat to macroeconomic stability," it said.
"The authorities will continue to deploy their regulatory
powers to prevent traders imposing unjustified hikes on consumer
prices. The central bank has been vigilant in managing credit
growth and has a full armoury of effective tools."
An earlier explosion of bank loans to the real estate sector
led some analysts to fear a bubble, but the authority said
year-on-year growth in commercial banks' credit to private
construction and real estate firms had dropped to 8.3 percent in
October from above 40 percent around the end of last year.