September 27, 2017

Qatar imports rebound in August, suggesting sanctions impact fading

The value of Qatar’s imports rebounded sharply from July to August, government data showed on Wednesday, suggesting the economic impact of sanctions imposed by other Arab states is fading.

Imports plunged by over a third after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Doha on June 5.

The sanctions – over accusations of supporting terrorism, which Doha denies – disrupted shipping routes to Qatar and closed its land border with Saudi Arabia, over which food and building materials were imported.

In August, however, imports jumped 39.1 per cent to 8.68 billion riyals (2.38 billion dollars), the planning and statistics ministry said.

Imports were 7.8 per cent below their year-earlier levels, but that still marked a major recovery from levels of June and July, when they dropped more than 35 per cent year on year.

Since the diplomatic crisis erupted, Qatari companies and foreign shippers have sought to establish new shipping routes to Qatar via other countries including Oman, compensating for the loss of Dubai as a trans-shipment centre.

Those efforts now appear to be bearing fruit. Imports of large equipment recovered sharply in August after being slowed for a couple of months by the disruption to shipping routes.

Gas turbine equipment, some of it used in the production of natural gas, increased 76.5 per cent from a year ago to 630 million riyals while aircraft parts surged 39.7 per cent to 306 million riyals.

Motor vehicle imports continued to slump, however, they were down 57.8 per cent from a year earlier at 267 million riyals.

This may have been caused by damage to domestic consumption and consumer sentiment in the wake of the crisis.

The stock market has plunged and some analysts believe economic growth has slowed, although they do not predict a recession.

Qatar’s exports, the vast majority of them natural gas and oil, climbed 17.7 per cent year-on-year to 21.30 billion riyals in August.

As a result, its trade surplus expanded 45.4 per cent to 12.62 billion riyals.