Economic report: Qatar equity and Saudi GDP growth falls

CAIRO – 2 July 2017: The sea, land and air blockade imposed on Qatar since June 5 pushed its equity market down nine percent, London-based think tank Capital Economics said in a Saturday research note.

While yields on Qatar’s 2026 dollar bond have hiked 50 basis points, the effect of the diplomatic rift with Qatar on the wider economy is still limited, Capital Economics said.
The rift has prompted Doha to find new import channels as the small Gulf country is importing now through the Oman port rather than Dubai’s Jebel Ali. However, “Qatar’s oil and gas shipments are not affected and the Dolphin pipeline, which sends gas to the U.A.E., is still open,” the report said.

Commenting on Saudi Arabia’s economy, Capital Economics said the economy contracted in Q1 2017 on oil production cuts, while the non-oil sector showed signs of recovery.

Oil output fell 2.3 percent in Q1 year-on-year, after it grew 4 percent in the previous quarter. Meanwhile, GDP fell 0.5 percent year-on-year, down from 1.2 percent year-on-year growth in Q4 2016.

“Non-oil GDP expanded by 0.6 percent year-on-year in Q1, up from 0.4 percent year-on-year in Q4, on the back of faster growth in the non-oil private sector,” the report added.