Qatari authorities have reasons to celebrate the performance and prospects of the country's economy. The International Monetary Fund has extended a deservedly healthy report pertaining to the local economy.
Among other things, the IMF believes that Qatar's gross domestic product (GDP) grew at 6.5 per cent in 2013, second to none within the six-nation Gulf Cooperation Council. What's more, the economy is projected to expand by a sizable 7 per cent in 2015 on the back of developments outside of the petroleum sector.
All the statistics are in real terms, adjusted for inflation. Happily enough, the economy is not suffering from serious inflationary pressures.
The performance reflects steady investments in non-hydrocarbon sectors, notably construction, financial services and hospitality.
Suffice to say that projected spending for fiscal year 2014-15 stands at $60 billion (Dh220 billion), up by 3.7 per cent from the budgeted figure for 2013-14. This record spending is part of a broader investment plan designed to prepare Qatar for the 2022 World Cup, being held for the first time in the region.
The plan calls for investing some $182 billion in a span of five years covering projects such as the metro and light rail systems as well as expansion of road networks.
The sizable figure excludes investments in the oil and gas sector. Anyway, a sort of moratorium remains for further expansion of the gas industry, a move designed to make maximum use of existing capacity.
Nevertheless, IMF's warning of overheating in the economy via substantial spending cannot be ignored. This is partly evidenced by the projection of inflation rates of around 3 to 4 per cent in 2014 and 2015.
Certainly, this is a reasonable rate for an economy experiencing robust growth rates. The credit goes to developments in the commodity markets, namely the absence of hikes in imported prices.
In retrospect, the Qatari economy suffered from double-digit inflation rates in 2007 and 2008 on the back of drop in the value of the US dollar combined with rise in imported food prices. (Hence the term imported inflation.)
The dollar is used for pricing oil, in turn a strategic product for Qatar.
In addition, the IMF's call for assuming realistic rates for average oil prices in preparing the annual budgets is fair and realistic. As a proof, the budget for fiscal year 2014-15, which entered into force in April, was prepared with an average oil price of $65 per barrel.
This marks the third time in a row of assuming such an unrealistic oil price level. Actual prices continue to hover around $100 per barrel.
The hydrocarbon sector remains the primary source of budgetary revenues and export earnings, and continues to dominate GDP components.
Records show assumption of an improbably low oil price allow for posting disproportionate budgetary surpluses. By one account, the budget posted a surplus of around $25 billion in fiscal year 2013-14, which ended in March.
The fact that per capita income in Qatar is the highest in the world says a great deal about the well-being of its economy. The World Bank puts the value of Qatar's per capita on power purchasing parity basis at $146,521 per annum based on 2011 figures.
Also, Qatar achieved regional leadership in the Network Readiness Index (NRI) as part of the recently released Global Information Technology Report 2014. Qatar is ranked 23rd worldwide, the best amongst Arab countries.
The challenge for Qatar concerns maintaining global leadership in economic growth and per capita income levels.
The writer is a Member of Parliament in Bahrain.