Impact of blockade on Qatar fading, says IMF

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The economic and financial impact on Qatar of a nine-month Saudi-led blockade is fading, but some risks for the Gulf emirate remain, the International Monetary Fund has said.

In a report released this week, the IMF said the effect of the blockade on economic activity in Qatar had been “transitory” as new trade routes were quickly established and growth remained positive.

Foreign financing and resident private sector deposits had fallen by $40bn but that had been offset by cash injections by the central bank and the Qatar Investment Authority – the emirate’s sovereign wealth fund, it said.

Although Qatar’s economy and banking and financial systems remain sound, there are still some risks, the IMF said.

“The main risks relate to the possibility of lower hydrocarbon prices, the implementation of planned fiscal measures and uncertainty associated with the lingering impact of the diplomatic rift.”

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Like other Gulf energy producers, Qatar has been hit by the slump in world oil and gas prices which has forced it to introduce austerity measures to balance its books.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut all diplomatic and trade ties with Qatar last June, closing its only land border and banning all flights to and from the emirate.

Published on 8 March 2018

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