World Economy

FDI in Qatar Rises 27% Showing Investor Trust

FDI in Qatar Rises 27% Showing Investor Trust
FDI in Qatar Rises 27% Showing Investor Trust

Foreign direct investment in Qatar has risen by around 27% last year, which shows that the trust of global investors in the country’s economy is intact.

Qatar attracted $986 million inward FDI last year compared to $774 million in 2016, according to the ‘World Investment Report 2018’ released by the United Nations Conference on Trade and Development, The Peninsula reported.

Increase in FDI in Qatar is commendable considering the overall trend in the region was not encouraging as the region saw a declining trend in attracting foreign funds. The West Asia region, which include Qatar and other 12 countries, witnessed a fall of around 17% in 2017. The region attracted $25.5 billion during last year which was around $5.2 billion less than $30.8 billion attracted by the countries in the region in 2016.

Increasing foreign investment is a signal of growing confidence of global investors in Qatar’s robust economy. The foreign investment has risen at a time when the country was put under unjust blockade by siege countries (Saudi Arabia, the United Arab Emirates, Bahrain and Egypt). The trust of global investors remained firm in Qatar’s economy reflecting that the fundamentals of the economy are strong.

According to the report, FDI in Qatar last year was around 1% of gross fixed capital formation. The inward FDI stock in the country increased from $33.9 billion in 2016 to $34.9 billion in 2017.  

The flow of foreign funds is expected to continue this year and the coming years due to the proactive steps taken by the government.

Last month, the cabinet approved a draft law that allows non-Qatari investors to invest 100% capital in all sectors. In another capital-attracting move, many Qatar Stock Exchange listed companies have increased their foreign ownership limit to 49%.

Meanwhile, Fitch Ratings has upgraded the outlook of Doha Bank from ‘negative’ to ‘stable’ and affirmed the long-term Issuer Default Ratings at ‘A’.

The upgrade to stable, follows the revision of the Qatari sovereign’s outlook to stable from negative and affirmation of the country’s Long-Term IDR at ‘AA-’, and reflects Fitch’s view that Qatar has successfully managed the fallout from last year’s rupture of trade, financial and diplomatic relations with the Arab quartet.

Public sector liquidity injections have stabilized the banking sector and stemmed the outflow of non-domestic funding.

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