World Economy

Qatar Growth at Lowest Level Since 2011

Qatar has been pushed into austerity measures in an effort to stabilize its finances.Qatar has been pushed into austerity measures in an effort to stabilize its finances.

Preliminary first-quarter gross domestic product data for Qatar, adjusted for inflation, has showed annual growth at its lowest level since at least 2011.

Qatar’s Ministry of Development Planning and Statistics said GDP rose by 1.1% in the first quarter of 2016, 2.7% lower than the previous quarter.

The data, cited by Reuters, showed mining and quarrying sector, which includes oil and gas, shrank 3% year-on-year and decreased 2.5% quarter-on-quarter.

The rest of the economy grew 5.5% from a year earlier but shrank 2.7% from the previous quarter.

Qatar, the world’s biggest liquefied natural gas exporter, is one of the richest of the Persian Gulf Arab states but like its neighbors, it has been pushed into austerity measures this year in an effort to stabilize its finances.

In June, the ministry predicted Qatar’s economy would grow 3.9% this year, down from a previous 4.3% forecast. It expects growth of 3.8% next year and 3.2% in 2018.

Earlier this year, Fitch Ratings said growth in Qatar’s non-oil economy is forecast to slow this year to 6% from an estimated 8% last year.

The ratings agency said in a statement that average non-hydrocarbon growth in Qatar has been 10% over the past five years. It said the slowdown will be a result of a less benign fiscal environment, where a contraction in current spending and a focus on fiscal efficiency leads to a slowdown of both private and public consumption growth.

 Buys Stake in US

Meanwhile, State sovereign wealth fund Qatar Investment Authority has made a $622 million investment in the owner of New York’s Empire State Building.

The investment represents a roughly 9.9% stake in Empire State Realty Trust, the company announced in a press statement.

Trust president and COO John Kessler said the company saw the investment as an endorsement of its strategy. “We continue to plan for the future, now with more capital and one of the most sophisticated and reliable real estate investors in the world as our partner. As we continue our internal growth strategy execution, added strength and flexibility in our balance sheet expand our capacity to take advantage of opportunities through external growth,” he said.

QIA purchased the 29,610,854 shares, which represent 19.4% ownership of the trust’s Class A shares, for $21 per share.

The acquisition follows the opening of a New York office by QIA in September last year.

At the time the fund said it would invest $35 billion in the US over the next five years.