Qatar's political and business leaders have been talking up the health of the country's economy, predicting a soft landing instead of a crash, though there are signs of a few bumps in the road ahead.
On November 4, Qatari Emir Sheikh Hamad bin Khalifa Al Thani cited a number of key factors that would help the country ride out the global economic storm.
"The consequences of the world crisis on the state of Qatar will be less than on many of the other developing countries," he told a meeting of the Advisory Council.
While acknowledging that lower energy prices would result in a fall in returns, Sheikh Hamad said that increased production would compensate for this, and that the state was prepared to use its monetary reserves if necessary. He added that the international economic downturn would not slow the drive to maintain sustainable development or further diversify the economy.
Though many pundits have been predicting a downturn in the Gulf's real estate sector, Max Thorne - vice president for development in the Middle East, Africa and Europe at BridgeStreet Worldwide, an international property firm specialising in corporate housing - said he feels confident that Qatar's fundamentals are solid.
"Our decision to set up business here is clearly reflected on our perception about the local market," he told the local press on November 1. "Investors worldwide seem very bullish about Qatar, and we are here for the long-term."
With high reserves of energy resources and a planned path of development, Qatar's real estate sector is well placed to overcome the global crisis, he said.
Similarly, Ray Maurer, managing director of Qatar National Bank (QNB), provided assurance that Qatar is well insulated from the global economic downturn. He cited positive aspects of the crisis, such as an ease in inflation, with the costs of construction materials falling due to slowing international demand.
"Domestically, the prices of concrete and steel will start to fall," Maurer told a seminar in Doha on November 4.
But Maurer did sound a note of caution, warning that falling global demand for oil could lead to slower growth and possibly a shallow recession.
It may take some time for the effects of the expected fall in inflation to be felt in Qatar. According to a report from the IMF, the country's inflation rate - currently the highest in the region - will reach 15% this year, compared to 13.8% recorded in 2007. The report, issued in late October, projected that inflation will ease to 13% next year.
More positive was the IMF's prediction for growth, with the economy expected to expand by 21.4% in 2009, up from the forecast 16.8% for this year. Additionally, an increase in completed residential properties coming on the market should help alleviate the supply constraints that have fuelled inflation.
Even with many touting the strength of the Qatari economy, the findings of the latest HSBC Gulf Business Confidence Survey, released on October 29, showed a fall in optimism in the region's business community. The HSBC confidence rating across the GCC fell to 92 at the end of the third quarter of the year, its lowest level since the survey was first conducted in February 2007.
Though confidence is down in Qatar, along with all the Gulf states except Bahrain and Saudi Arabia, the survey did find that 57% of respondents expected their revenue to increase in the final quarter of the year, while 48% expected to bolster their year-on-year investment budget. Significantly, nearly two-thirds believed that the last quarter of 2008 would be better than the preceding quarter.