Qatar’s economy has undergone significant transformation since 2010, when it was awarded hosting rights for the 2022 FIFA World Cup. A major infrastructure build saw the construction of arenas, hospitality, retail, transport and leisure facilities. The government strategically leveraged the international exposure to attract higher inflows of foreign direct investment (FDI), aligning with its broader economic diversification agenda. Qatar possesses the world’s third-largest natural gas reserves and is among the largest exporters of liquefied natural gas (LNG) globally. Those strengths, coupled with a population of around 3.1m, endow Qatar with vast sovereign wealth and one of the highest GDP per capita figures in the world. This economic position, underpinned by a prudent fiscal strategy and well-regulated financial systems, contributes to the country’s strong macroeconomic fundamentals. Challenges, nevertheless, remain in a region where neighbouring countries lay claim to similar strengths and where economic diversification is the focus, causing fierce competition in relation to trade and investment. Qatari authorities are therefore working to enhance business legislation in order to arrest a recent downward trend in FDI inflows.
Strategy, Progress & Challenges
The Third National Development Strategy (NDS-3) was launched in January 2024 to guide progress towards the goals of Qatar National Vision 2030, the government’s socio-economic development blueprint. Economic diversification is the underlying goal of medium- and long-term strategies, with the country’s non-hydrocarbons economy undergoing significant expansion in recent years. While the long-term plan is to wean the economy off hydrocarbons dependency, a massive gas production expansion project is under way on the country’s North Field reserve, with the first phase due online in 2026. The project will increase production capacity from its current level of 77m tonnes per annum (tpa) to 142m tpa by 2030, with a significant portion of the resulting additional government revenue to be pumped into the diversification drive.
NDS-3’s targeted strategic outcomes focus on enabling sustainable economic growth through enhanced public services, cultivating a vibrant private sector and improving the quality of life for citizens and residents, while retaining Qatar’s societal and cultural traditions. Strengthening the workforce and providing high-quality jobs for Qataris is fundamental to the strategy’s success (see analysis). The tourism and transport sectors are being harnessed to spur multi-sector growth, with visitor numbers rising from just over 2.1m in 2019 to more than 5m in 2024. Such growth has proven a boon for the country’s expanding portfolio of hospitality, retail and recreation establishments. Of the 5m visitors entering the country in 2024, 56% did so by air, 37% by land and 7% by sea, demonstrating Qatar’s high-quality, diverse transport systems and networks, developed to drive economic diversification and boost logistics capacity, with major upgrades implemented in time for the 2022 FIFA World Cup.
Diversification Clusters
The government is in the process of creating diversification clusters for targeted sectors, with significant opportunities for private investment in manufacturing, logistics, financial services, education, food and agriculture, health care, and future clusters. The last of these includes a focus on green technologies, media and creative industries. Advanced technologies, digitalisation and research, development and innovation (RD&I) are central to the government’s ambition to transform Qatar into a knowledge economy; therefore, the ICT sector has seen major strategic investment. The internet penetration rate is 99%, and its strong digital uptake is driven in part by a youthful population – approximately 65% of its 3.1m residents are between the ages of 18 and 44. This demographic advantage, coupled with ongoing investment in digital transformation, has contributed to Qatar achieving steadily improved positions in regional and global digital economy rankings in recent years, underscoring its progress towards becoming a digitally advanced economy.
Through the NDS-3 the government is targeting a cumulative total of $100bn in new FDI by 2030, with increased inflows of foreign finance instrumental to the success of economic diversification initiatives, yet the general trend in recent years has seen a contraction in total inward FDI stock, with the exception of 2022 when the country hosted the World Cup. That year, according to the UN Conference on Trade and Development, Qatar’s inward FDI stock grew by $76.1m for a total of over $27.6bn before dropping by $471m to $27.1bn in 2023 (see Trade & Investment chapter). Despite recent and significant improvements to business regulation, stakeholders believe, and indeed data suggests, that work is still required to strengthen the country’s private sector and enhance governance frameworks in order for the country to compete on the regional stage. In recognition of that, the government announced in early 2025 that it was reviewing and updating regulations with three new laws, relating to bankruptcy, public-private partnerships and business registration, set to be launched in the near term.
Structure
Qatar operates under a constitutional monarchy with the Amir the head of state. The Amir holds executive power and is assisted in decision-making procedures by the Council of Ministers, also referred to as the Cabinet, which comprises the heads of the various government ministries. Legislative rule is carried out through the Advisory Council, known locally as the Shura Council, while under the national constitution, judicial power rests with the courts, which pass rulings in the name of the Amir. The prime minister heads the Council of Ministers, presiding over sessions and supervising ministerial activities to ensure cohesion between government bodies. Decisions made by the Council of Ministers are signed by the prime minister on behalf of the council. In accordance with the constitution and the provisions of the law, the Council of Ministers is the supreme executive body relating to internal and external affairs.
Key Authorities & Entities
Although Qatar is in the process of diversifying its economy, it remains heavily dependent on hydrocarbon exports and revenue. The Supreme Council for Economic Affairs and Investment (SCEAI) supervises all matters relating to the economy, financial reserve development and the energy sector. It therefore sets energy policy, with regulation carried out by the Ministry of Municipality and Environment (MME). The minister of state for energy affairs, Saad bin Sherida Al Kaabi, operates between the SCEAI and MME, and is responsible for overseeing energy sector procedures, the development of energy value chains, and ensuring optimal utilisation of natural resources and steady provision of power and water for households. Al Kaabi is also deputy chairman, president and CEO of Qatar Energy (QE), the national energy corporation. QE is run by a board of directors and the company’s role in the economy is enshrined by various laws, which see it responsible for carrying out or authorising all activities throughout the hydrocarbons value chain.
National finances, financial markets and related policies and activities are overseen, regulated and executed by the Ministry of Finance (MoF), the Qatar Financial Markets Authority (QFMA) and Qatar Central Bank (QCB). The activity inside Qatar Financial Centre (QFC) – one of the country’s multiple free zones – is managed and regulated by the QFC Regulatory Authority (QFCRA). The government aims to establish Qatar as an international financial technology centre, and QFC is central to that drive. The MoF regulates financial policy, manages public finance, drafts and implements the government budget and updates national fiscal policy in line with national objectives. The QFMA regulates and manages financial and capital markets, overseeing and promoting activity on the Qatar Stock Exchange (QSE), ensuring transparency for investors and stakeholders and setting standards.
The QCB’s core mandate sees it working to regulate financial services and maintain the value of the currency, the riyal, setting policy designed to stabilise both inflation and the exchange rate. QCB policy is also designed to support Qatar’s businesses and enable the private sector to grow and flourish. In October 2024 the government announced that up to $1.4bn of loans to the private sector would be written off and restructured, with start-ups and small and medium-sized enterprises the primary beneficiaries, while in December 2024 the QCB released new regulations for digital banks designed to broaden access to finance for businesses and entrepreneurs.
Other key authorities include the Investment Promotion Agency (Invest Qatar), which was established in 2019. It works alongside other ministries and authorities, such as the Ministry of Commerce and Industry (MoCI), Qatar Free Zones Authority (QFZ), QFC and Qatar Science and Technology Park, to enhance Qatar’s investment environment and attract FDI into the industries and sectors targeted under the diversification agenda. Operating as a gateway organisation and investment partner, Invest Qatar plugs international investors into national business ecosystems, facilitating licensing procedures and providing market knowledge to aid business growth. The organisation’s endeavours in early 2025 saw it debut at the World Economic Forum in January, while also sealing partnerships and agreements with counterpart organisations in India, Portugal, Saudi Arabia and Uzbekistan to increase bilateral coordination and cooperation. The mutual strengthening of start-up and innovation ecosystems was a key motivation behind those agreements. Meanwhile, US-based international payment platform Yuno partnered with Invest Qatar to establish a new regional headquarters in the country.
Most Qatar-based businesses are supervised by the MoCI. The ministry seeks to attract investment into the economy, while simultaneously devising and implementing policy and regulation for the purpose of developing commercial and industrial processes. The MoCI issues business licences while working to ensure transparency and fairness for businesses and consumers. Protection of intellectual property rights is an important MoCI duty given the government’s drive to attract investment in RD&I-related activities.
Qatar Investment Authority (QIA) is influential in Qatar’s economic development, with the sovereign investment entity’s investment stretching throughout domestic and global value chains. An important component of QIA’s current strategy sees it working to deepen the country’s pool of venture capital to strengthen the national start-up ecosystem.
Investment Law
Qatari investment law was updated in 2019, allowing for full foreign company ownership in most sectors. Prior to 2019, non-Qatari shareholdings were limited to 49% of company stock. The updated law was designed to incentivise investment in the government’s diversification drive, thereby strengthening the private sector and providing employment opportunities for citizens and residents. Restrictions still apply to certain sectors and activities, such as real estate ownership, which is only permitted in certain zones, and the establishment of commercial agencies, while investment in banking and insurance activities requires approval from the Council of Ministers. Meanwhile, as a general rule, a 49% foreign shareholding limit is enforced for companies floated on the QSE, with exceptions granted by the Council of Ministers. Indeed, a number of QSE-listed companies are now open to 100% foreign shareholding.
Property & Visas
Property ownership laws were updated and relaxed in 2018 and then again in 2020, with foreign freehold residential and commercial ownership now permitted in specific freehold zones. In addition to geographical restrictions, limitations on usage also apply in certain areas. Nevertheless, the new laws significantly improve upon previous legislation, which restricted foreign property occupancy to long leaseholds. Usufruct leaseholds are still available to investors with maximum durations of up to 99 years.
In addition to full freehold rights, property ownership status grants inheritance rights relating to owned properties, the right to sell or lease property, and commercial usage and development rights pertaining to regulation in specific zones. There are nine freehold ownership areas, which include the Lusail, Pearl and West Bay developments, while usufruct holdings are available in a further 16 zones. Long-term, temporary visa and residency rights without need for a sponsor are offered to investors purchasing properties valued QR730,000 ($200,000) and over. Meanwhile the purchase of real estate valued at or over QR3.7m ($1m) affords permanent residency status, bringing with it free access to health care and education, among other benefits. The latter option is one of three available routes to securing a Qatar Golden Visa, which was launched in 2020. Golden Visas are also available to foreigners making significant business investment and to those deemed exceptional talents with skillsets relevant to the government’s targeted sectors. To be eligible, applicants must satisfy various criteria and be at least 21 years of age.
Monetary Policy & Performance
Qatar pegs its currency to the US dollar at a rate of QR3.64 to $1, so maintaining stability in that respect is central to the QCB’s remit. The QCB therefore works to manage short-term interbank rates with the aim of maintaining riyal-dollar parity. QCB interest rate policy revolves around managing liquidity in order to align the average overnight interbank rate with the QCB deposit rate. The relevant QCB departments and committees meet every six weeks to monitor the riyal interest rate against international interest rates, particularly the US Federal Funds Rate, with decisions relayed to the banking and general populations via various business and media channels. Commercial banks trade the US dollar based on the QCB exchange rate, although a 0.24% margin is added when trading with the consumer population.
In December 2024 the QCB announced it would cut key interest rates by 30 basis points, in line with the US Federal Reserve cutting its own rates by 25 basis points. The move saw the QCB deposit, lending and repo rates reduced to 4.6%, 5.1% and 4.85%, respectively. A follow-up review on January 30, 2025 resulted in the QCB maintaining those rates, and they remained until the time of writing in May 2025.
Qatar’s financial sector and economy are among the most stable in the region. Ratings agencies S&P, Moody’s and Fitch listed Qatar’s sovereign ratings at “Stable/AA”, “Stable/Aa2” and “AA Stable”, respectively, at the time of writing in May 2025. Meanwhile, the QCB website displays the strength of the banking industry. By January 2025 total sector assets were more than QR2trn ($549bn), with credit of around QR1.4trn ($384bn), bank capital and reserves of QR197bn ($54.1bn) and deposits valued at QR1trn ($274.5bn).
Qatar is working to position itself at the forefront of the global shift towards sustainability and digitisation in financial systems and services. Product innovation, advanced supply chain logistics, trade finance solutions and strategic investment in digital assets and advanced technologies such as blockchain and augmented realities are among the factors driving the modernisation of the Qatari banking sector, with a focus on asset quality enabling banks to exceed regulatory standards and requirements.
As of December 2023 the most recent period for which QCB displays relevant data, the Qatari banking sector had an overall Tier 1 capital adequacy ratio of 18.2%, which was well above the global average Tier 1, 10-year high of 13.4% and the average Tier 1 ratio of significant institutions overseen by the European Central Bank, which stood at 15.7%, during the same year (see Banking chapter).
While Qatar experienced relatively high levels of inflation in 2022, with average consumer prices displaying a 5% change that year, this rate was nevertheless lower than the emerging economies average of 9.6% that year, according to IMF data. A series of robust and coordinated policy measures from the government and QCB, which included previously detailed interest rate hikes and the extension of government subsidies, in unison with global food prices gradually brought inflation under control, with average consumer prices increasing by 1% during 2024 and coming in at 1.4% by March 2025, both of which are the lowest in the GCC for their respective periods.
GDP Performance
According to the IMF, Qatar’s real GDP grew by 4.2% in 2022, 1.2% in 2023 and 1.5% in 2024. A key driver of the country’s heightened economic activity was in the lead up to the 2022 FIFA World Cup. High growth in 2022 was spurred by other factors, including high hydrocarbons prices brought on by the post-pandemic fracturing of global supply chains and Russia’s invasion of Ukraine. The latter event also negatively impacted the global availability of natural gas, causing further increases in gas prices, due to Russia’s position of prominence in the global gas supply landscape and the economic and diplomatic sanctions imposed on it by many countries.
Both Qatar and the US stepped in to absorb excess demand. During 2023 QE signed 27-year deals with UK-based Shell and France’s Total Energies that see Qatar now the primary supplier of LNG to the Netherlands and France. According to Statista, the global monthly gas price index rose from 390 in February 2022 (the month the Ukraine war began) to 558 in March, peaking at 893 in August 2022. The index fell as low as 124 in February 2024, while in January 2025 it hovered just above 225 basis points, according to the most recent data published by the research firm.
The gradual repair of global supply chains and the easing of global inflation have seen hydrocarbons prices and, subsequently, Qatar’s GDP growth moderate during the last couple of years. Quarterly breakdowns from the National Planning Council Qatari show that non-hydrocarbons GDP is outpacing oil GDP and total GDP. Between the fourth quarter of 2023 and the third quarter of 2024, the oil economy contacted by a year-on-year (y-o-y) quarterly average of 1.6%, while the non-hydrocarbons economy grew at an average rate of 2.6%. During the first three quarters of 2024 wholesale and retail trade displayed average y-o-y quarterly growth of 3.8%, while transport and logistics-related activities expanded by an average of 7.3%. Meanwhile, the education sector grew by an average of 7.9%, while the real estate sector grew by an averaging of 6.6% over the same timeframe. Hydrocarbons activities still contribute around 35% to GDP, while the top-three contributing non-oil sectors during the first three quarters of 2024 were construction at 11%, financial and insurance activities at 8.4%, and wholesale and retail trade registering 7.6%.
The MoF anticipates steady economic growth for Qatar over the medium term, with GDP projected to rise by 2.4% in 2025. This is expected to more than double to 5.2% in 2026. The upward trend is forecast to continue into 2027, when GDP is projected to expand by a substantial 7.9%, marking the peak of the five-year period. A softening is expected in 2028, with economic growth forecast to ease to around 3.5%, followed by a further moderation to 1.6% in 2029. Taken together, these annual figures yield an average growth rate of approximately 4.1% over the 2025-29 period.
Additionally, Fitch Ratings presents a confident outlook for Qatar’s economic trajectory, citing gas production expansion as the driver of a predicted government surplus of 3.9% of GDP, a figure which drops to 0.9% of GDP if anticipated profit from QIA investment is subtracted. Fitch predicts the aforementioned surplus will decrease to 3.3% in 2026 in line with its expectation of reduced hydrocarbons prices. Meanwhile, Qatar’s ratio of net foreign assets to GDP is expected to increase in the coming years alongside the progressive augmentation of the country’s recently assumed status as a net external creditor.
Budget & Public Spending
In its 2025 budget announcement, made in December 2024, the government forecasts annual revenue of QR197bn ($54.1bn) and expenditure of QR210.2bn ($57.7bn), for an anticipated deficit of QR13.2bn ($3.6bn). A prudent hydrocarbons price forecast sees projected revenue set 2.5% lower than in 2024. Based on an estimate of $60 per barrel of crude oil, hydrocarbon revenue is forecast at QR154bn ($42.3bn) in 2025, down 3.1% from QR159bn ($43.6bn) in 2024. Non-oil revenue is therefore estimated at QR43bn ($11.8bn) in 2025, the same as the previous year. Planned expenditure is 4.6% higher, with a combined allocation of QR41.4bn ($11.4bn), roughly 20% of the total, for the health care and education sectors, emphasising the government’s commitment to improving the quality of life and human capital within the country. While no specific figures were offered, significant allocations have been made to develop strategic sectors including trade and industry, RD&I, tourism, digital economy and ICT. Public sector salaries will rise by an estimated 5.5% in 20205 to QR67.5bn ($18.5bn), while current and capital expenditures will go up by 6.3% and 7.7%, respectively. The continued implementation of existing development projects will see major capital expenditure increase by 1.4%.
Trade
National Planning Council (NPC) data show that Qatar’s total value of trade in 2023 came to QR470.2bn ($129.1bn), with exports valued at QR355.8bn ($97.7bn) and imports valued at QR114.4bn ($31.4bn) for an overall surplus of QR241.3bn ($66.2bn). A 24.3% contraction in the balance of trade in 2024 equated to a surplus of QR182.7bn ($50.1bn), with exports valued at QR300.3bn ($82.4bn) and imports valued at QR117.6bn ($32.3bn). Qatar’s key trading partners include China, India, Italy, Japan, Singapore and the US, while significant increases in trading volumes and values between Qatar and other GCC countries were recorded during the first eight months of 2024, which is as far as the NPC’s itemised breakdown stretches.
Outlook
Qatar’s economy, backed by immense hydrocarbons reserves and high sovereign wealth, is strong and stable. Regulatory barriers to investment can be overcome through dialogue and coordination with private sector players and stakeholders, with positive steps now being taken in that respect. The country’s prominent status in global gas markets positions it as a vital linkage in international value chains, enabling it to weather economic disruption brought on by geopolitical upheaval better than most economies.
This strong position will benefit the country as regional competition increases, especially with GCC member states focusing more on economic diversification. If Qatar can bring its business regulations in line with those of its regional peers and effectively promote its improvements – such as better access to credit, strong banking fundamentals, advanced logistics and industrial infrastructure, and a favourable tax environment – it will likely attract more foreign investment. Given the already demonstrated interest from international investors in the region, these efforts could significantly boost FDI in the near future.
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