meed-logo

line1 line2 line3
SIGN IN / REGISTER

Qatar economy rebounds alongside diplomatic activity

13 January 2025

 

Qatar welcomed some 5.1 million visitors in 2024, the highest number on record and representing a 25% year-on-year increase. But the growing waves of holidaymakers have not been the only notable arrivals of late – regional political figures have also been showing up, as Doha resumes its efforts to resolve the Gaza conflict while also seeking to play a role in rebuilding Syria.

The diplomatic activity comes at a time when the broader economy is emerging from its post-World Cup slump. After the football tournament ended in 2022, there was something of a slowdown, as activity in the construction and services sectors eased off.

According to the Washington-based IMF, real GDP growth fell from 4.2% in 2022 to just 1.2% in 2023. In its latest report on the economy, published in early December, the IMF suggested the rebound had started, with GDP growth of about 2% in 2024/25.

Over the medium term, the IMF expects growth to rise to about 4.75%, helped by a significant expansion of LNG production.

Others take a similar view. On 7 January, Dubai-based bank Emirates NBD revised down its 2024 GDP growth forecast for Qatar to 1.7%, from 2% previously. But it said it expects growth to tick up to 2.6% this year and then accelerate to 4.8% in 2026, as more gas exports come online.

While hydrocarbons will continue to be the most important element of the economy for many years, tourism will play an increasingly important role in economic diversification efforts. 

The country now has more than 40,000 hotel rooms – substantially more than the 31,000 permanent rooms in place when the football tournament was on (augmented by 100,000 temporary rooms on cruise ships and in fan villages and rented homes and apartments).

The number of visitors since the tournament has risen substantially: from 2.6 million in 2022, the figure rose to 4.1 million in 2023 and over 5 million last year. Many more travel through Hamad International airport, which handled almost 53 million passengers in 2024, some 15% more than the year before.

Citizens of more than 100 countries are eligible for visa-free entry to Qatar. That open-minded approach also informs the country’s diplomatic activities.

Diplomatic re-engagement

On 28 December, Prime Minister and Foreign Affairs Minister Sheikh Mohammed Bin Abdulrahman Al-Thani met a Hamas delegation led by Khalil Al-Hayya to discuss a potential Gaza ceasefire deal. Doha had shuttered its mediating efforts in early November, saying neither Hamas nor Israel were engaging seriously.

In January, the diplomatic activity stepped up further, as indirect talks mediated by Qatar resumed. David Barnea, the head of Israel’s Mossad intelligence agency, travelled to Doha, as did US President Joe Biden’s Middle East envoy Brett McGurk. Early reports suggest some progress was being made.

“There are extensive negotiations. Mediators and negotiators are talking about every word and every detail. There is a breakthrough when it comes to narrowing old existing gaps, but there is no deal yet,” one unnamed Palestinian official close to the talks told Reuters.

Activity relating to Syria has been even more pronounced. Unlike some other Gulf states, Doha had resisted the urge to normalise relations with Bashar Al-Assad in recent years, even as many observers assumed his regime had survived the revolution and would continue to hold power in Damascus indefinitely.

As other countries reopened their embassies, Qatar’s remained shuttered. That changed nine days after the Assad regime fell, when the Qatari diplomatic presence in Damascus reopened for business on 17 December. Khalifa Abdullah Al-Sharif was appointed as charge d’affaires.

The new Syrian regime led by Hayat Tahrir Al-Sham (HTS) appears warmly disposed towards Doha. Visiting the Qatari capital on 5 January, Syria’s Foreign Affairs Minister Asaad Al-Shaibani described Qatar as “a strategic partner”.

On 23 December, Minister of State at the Ministry of Foreign Affairs Mohammed Bin Abdulaziz Al-Khulaifi had travelled to Damascus, where he met HTS leader Ahmed Al-Sharaa (better known during the revolution by his nom de guerre Abu Mohammad Al-Julani) to discuss bilateral relations.

Among other things, Qatar has been helping to restart operations at Damascus International airport – international flights resumed on 7 January, with the first arrival coming in from Doha (the first departure went to Sharjah). Qatar, along with Turkiye, has also reportedly pledged to supply electricity-generating ships to provide 800MW of power to the country. 

Al-Shaibani’s visit to Doha in early January was part of a wider tour of key Gulf capitals. While in Qatar, he called on Western countries to remove sanctions on his country, saying they “constitute an obstacle to the rapid recovery of the Syrian economy … We renew our demand for the United States of America to lift the sanctions to speed up the recovery and start building the new Syria”.

The following day, the US announced a six-month suspension of sanctions on dealings with the Syrian government. Senior European figures have indicated they could soon take similar steps. Among other things, relaxing sanctions could enable Doha and other Arab governments to help fund salaries for Syrian public sector employees.

The health of Qatar’s public finances means such support is easy to provide. The government has consistently run a budget surplus in recent years, and that is expected to continue. Emir Sheikh Tamim Bin Hamad Al-Thani approved the budget for 2025 in mid-December. It includes spending of QR210bn ($58bn) and revenues of QR197bn, pointing to a deficit of QR13bn.

However, UK-based Oxford Economics has pointed out that the figures were based on conservative oil price assumptions. The consultancy expects Doha to actually run a surplus of QR12bn for this year, down from QR25bn in 2024 but still substantial. “These projections underscore Qatar’s fiscal discipline and sustainable policies,” it said in a 19 December report.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13257617/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Saudi authority awards Salboukh data centre contract

    8 July 2025

     

    The Saudi Data and Artificial Intelligence Authority (SDAIA) has awarded a contract to build a new data centre in the Salboukh area north of Riyadh.

    The contract was awarded to the local construction firm Albawani.

    MEED understands that the tender notice was first issued in August last year. The bids were submitted on 31 October.

    The planned data centre facility is expected to have an overall IT load capacity of 20MW.

    The project is anticipated to cost $140m-$150m.

    Saudi Arabia is experiencing an increase in data centre project activity as the government and private enterprises prepare to meet the demand arising from artificial intelligence (AI) applications.

    The SDAIA is leading the kingdom’s drive to become a major AI player by attracting AI-related investments into the country and fostering an AI startup ecosystem.

    The SDAIA’s research unit, the National Centre for AI, has developed a 7 billion-parameter large language model, known as Allam, which is designed to be an enabler of government services.

    Major Saudi enterprises, including Saudi Aramco, are also developing AI applications to boost the efficiency and productivity of their assets and employees.

    Evolving data sovereignty laws, which require personal and customer data to be stored within servers located in the kingdom, are further driving data centre construction activity.

    READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF

    UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge

    Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:

    > PROJECTS MARKET: GCC projects market collapses
    > GULF PROJECTS INDEX: Gulf projects index continues climb
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14218516/main.jpg
    Yasir Iqbal
  • Second train commissioned at Iraqi oil field

    8 July 2025

    A second oil processing train has been successfully put into production at Iraq’s West Qurna-2 oil field, according to a statement from China Petroleum Engineering & Construction Corporation (CPECC).

    US-based ExxonMobil awarded a $316m engineering, procurement and construction (EPC) contract for the second and third crude processing trains at the field to CEPCC in February 2022.

    ExxonMobil has since exited Iraq, handing over its stake in the West Qurna-1 field to PetroChina, the listed arm of state-controlled China National Petroleum Corporation (CNPC).

    In its latest statement, CPECC said that the project to develop the second train, which it calls OT2, included a total of 46 systems and 174 subsystems, involving 16,613 checklists.

    It said: “The project department has overcome multiple challenges such as the harsh natural environment by carrying out labour competitions and strengthening management.”

    The company stated that during the project’s execution, it completed 13 screw cast-in-place piles a day and poured more than 500 cubic metres of concrete a week for eight consecutive weeks.

    It also said that it welded 1,000 inches of pipe a day and hoisted five modules of large pipe gallery modules a day.

    The flare of the oil processing train was lit on 28 June 2025 after more than 900 days of work by 1,000 workers, according to CPECC.

    The company said that on 29 June, all of the units of the facility were connected and it became fully functional.

    It added: “At present, the OT2 unit is running stably, with a daily crude oil output of 60,000 barrels, and will gradually increase to 105,000 barrels per day.”

    CPECC’s project department in West Qurna-1 is now expected to focus on the production and operation of OT2, as well as the trial operation and commissioning of the third oil processing train, known as OT3.

    After OT3 is put into production, the crude oil processing project is expected to achieve a daily crude oil output of 210,000 barrels.

    READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF

    UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge

    Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:

    > PROJECTS MARKET: GCC projects market collapses
    > GULF PROJECTS INDEX: Gulf projects index continues climb
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14217387/main.png
    Wil Crisp
  • Slow year for Maghreb power and water awards

    7 July 2025

     

    The Maghreb region has experienced a slow 2025 in terms of power and water project contract awards. Hopes for the year now rely on a strong second half if the sector is to match the performance of previous years.

    As of early July, the total value of power project contract awards had reached $663m, according to regional projects tracker MEED Projects. This means that by the end of the year, the market is expected to fall significantly short of the peaks of $3.8bn in 2023 and $4.5bn in 2024. 

    Libya’s recovery was a major driver in 2023, accounting for $2.9bn of the total for that year, while Algeria contributed $430m and Morocco $210m. There are no recorded power contract awards for Algeria or Libya in 2025. Morocco and Tunisia contributed $353m and $310m, respectively. 

    The total value of contract awards for water projects has also declined significantly. For the first six months of 2025, the total reached $189m, which is tracking behind the $815m of water project contract awards recorded in 2024.

    Both 2025 and 2024 are far behind the peak of $3.6bn registered in 2022, when Algeria alone accounted for $1.8bn of contract awards, followed closely by Morocco with $1.6bn. 

    For upcoming power and water contract awards, there are over $6bn of contracts in the bid or prequalification stage that are expected to be awarded within the next year. 

    In the water sector, Libya leads with $210m of soon-to-be-awarded contracts, followed closely by Tunisia at $260m. In the power sector, Morocco stands out with an impressive projected contract value of $5.3bn, while in Tunisia, there are $300m of upcoming power contract awards.

    Xlinks disappointment

    There have been some notable project developments in the power and water sectors across the Maghreb region over the past year. Most recently, at the end of June, the UK government withdrew its support for the Xlinks Morocco-UK power project.

    The UK Department for Energy Security and Net Zero decided not to consider a contract for difference for this large-scale renewable energy initiative, which aimed to deliver 3,600MW of renewable energy from Morocco to the UK via a 4,000-kilometre high-voltage direct current cable system.

    Sir Dave Lewis, chair of Xlinks, expressed disappointment, emphasising the project’s potential to significantly lower wholesale electricity prices in the UK.

    Power progress

    Other projects in Morocco are proceeding. The Ministry of Energy Transition & Sustainable Development has issued an invitation for expressions of interest for a major liquefied natural gas (LNG) infrastructure project at Nador West Med Port. This project includes an LNG import terminal, pipelines and a gas power station with a capacity of approximately 1,200MW. The project aims to enhance Morocco’s energy security and diversify its energy sources.

    Additionally, Morocco’s National Office for Electricity and Drinking Water has invited firms to submit expressions of interest for contracts to build three gas-fired power stations with a total capacity of between 300MW and 450MW. These plants are expected to be commissioned by the summer of 2026, further contributing to the country’s energy infrastructure.

    Water advancements

    In the water sector, Algeria has inaugurated the El-Tarf desalination plant, which has a production capacity of 300,000 cubic metres a day. This facility is part of Algeria’s broader desalination programme, which aims to address water scarcity issues exacerbated by climate change. The Algerian government has allocated $3bn for the second phase of its desalination capacity expansion, with plans to build six new plants by 2030.

    Morocco is also advancing its water infrastructure, with Veolia undertaking the detailed design for a new seawater reverse osmosis plant near Rabat. This facility is expected to treat up to 822,000 cubic metres of seawater daily and will cater to regions particularly affected by drought.

    Policy focus

    For policy, governments have been manoeuvring as they respond to the global challenge of climate change. 

    Morocco is progressing with its green hydrogen initiatives, which are closely linked to its water projects. The country has set ambitious targets to produce 52% of its energy from clean sources by 2030, with plans to develop large-scale green hydrogen projects. These projects will require significant water resources for electrolysis, further intertwining the power and water sectors.

    Morocco also aims to increase its renewable capacity to 10,000MW by 2030, with a focus on solar, wind and hydroelectric power. Despite the recent Xlinks setback, the country is also exploring opportunities for exporting electricity to Europe, which could significantly enhance its energy market.

    Algeria is pursuing other avenues in its quest to diversify its energy sources. In April, Algerian Minister of Energy, Mines and Renewable Energies, Mohamed Arkab, met with Wang Yongge, president of the China National Nuclear Corporation (CNNC), in Algiers. The two reviewed the ongoing cooperation between Algeria’s Commissariat for Atomic Energy (Comena) and CNNC, focusing on the peaceful use of nuclear energy, its medical applications and prospects for future development.

    The Algerian government also plans to invest heavily in desalination projects to ensure a sustainable water supply, with desalinated water expected to account for 60% of drinking water by 2030.

    Main image: Noor electric power station close to Ouarzazate, Morocco
     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14212527/main.gif
    Colin Foreman
  • Iraq to retender Baghdad Metro PPP project contract

    7 July 2025

    Iraq intends to retender the contract to develop and operate the Baghdad Metro project, following the award of the estimated $2.5bn contract last year.

    According to local media reports, Nasser Al-Assadi, adviser to Prime Minister Mohammed Sudani, stated that the previous developers had overestimated the project budget; therefore, the government will relaunch the entire process to implement the project.

    Iraq’s National Investment Commission (NIC) awarded an estimated $2.5bn contract to develop and operate the Baghdad Metro project in July last year.

    The contract was awarded to a consortium comprising France’s Systra, Societe Nationale des Chemins de fer Francais (SNCF) and Alstom; Spain’s Talgo and Sener; and Turkish contractors.

    Germany’s Deutsche Bank was the project finance adviser.

    The project will be developed as a public-private partnership (PPP) scheme using a design, build, operate, maintain, finance and transfer model.

    Malaysian consulting firms ConsultantHSS and HSS Engineering were working on the project.

    Project scope

    The Baghdad Metro project is one of the largest infrastructure schemes in Iraq.

    It will comprise seven main lines totalling 150 kilometres (km), 64 metro stations, four workshops and depots for trains, two metro train control and management centres and power generation stations.

    The Green Line will extend 19km and run from the Al-Alawi terminal to the Doura terminal. The Red Line will be 27.7km long and will run from the Al-Alwai terminal to Maisaloun Square.

    The Blue Line will run 22km from the Al-Shaab terminal to Al-Zafaraniya. The Purple Line will be 14.5km long and will connect Al-Tayaran Square to Al-Shaab.

    The Yellow Line will extend 30km from Al-Baladiyat to Adan Square. The White Line will be 23km long and will run from Al-Kadhimiya to Al-Bayaa, while the Airport Line will run 12km from Baghdad airport to Al-Qadisiya.

    Each line will comprise a total of eight stations.

    The trains will include a gold-class cabin, a special cabin for women and children, and tourist cabins.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14211465/main.jpg
    Yasir Iqbal
  • Ibri 3 construction deal implies Masdar win

    7 July 2025

     

    A Chinese consortium of China Energy Engineering International Corporation (CEEC), China Power Construction Group East China Survey & Design Institute Company (East China Institute) and China Energy Construction Group Hunan Thermal Power Construction Company (Hunan Thermal Power) says it has won an early works contract to build the Ibri 3 solar independent power plant (IPP) in Oman.

    The engineering, procurement and construction (EPC) contract was awarded by Abu Dhabi Future Energy Company (Masdar), implying it has won the IPP’s development concession.

    Masdar, alongside Korea Midland Power (Komipo) and the local Al-Khadra Partners, was one of four groups to bid for the contract to finance, construct and operate the IPP in February.

    Under the terms of the EPC contract, the CEEC consortium will build the 500MW solar photovoltaic (PV) power plant together with an associated 150MWh battery energy storage unit. 

    It will also install a 400kV substation and two 400kV overhead transmission lines as part of the deal, it says.

    The client, Nama Power & Water Procurement Company (Nama PWP), received prequalification applications for the Ibri 3 solar PV IPP contract in March last year.

    Previous projects

    The sultanate’s first 500MW solar IPP scheme, Ibri 2, came onstream in September 2021 and was officially inaugurated in January 2022.

    The Manah 1 and Manah 2 solar IPP projects, each with a capacity of 500MW, were recently inaugurated. 

    A team comprising France’s EDF and South Korea’s Korea Western Power Company (Kowepo) won the contract to develop the Manah 1 solar PV IPP project.

    A team of Singapore’s Sembcorp Industries and China-headquartered Jinko Power Technology was awarded the second 500MW solar PV IPP contract.

    In September last year, Nama PWP tendered the contracts to develop two wind IPPs.

    The Jalan Bani Bu Ali wind IPP will cater to Oman’s Main Interconnection System (MIS), while the Dhofar 2 wind IPP will cater to the smaller Dhofar Power System (DPS).

    Three other wind IPPs are expected to be tendered separately. They are:  

    • Duqm wind IPP: Located in Ras Madrakah in Duqm, the project will have a capacity of 234MW-270MW, with commercial operations expected in Q4 2027
    • Mahoot wind 1 IPP: Located in Mahoot in the Al-Wusta Governate, the wind farm will have a capacity of 342MW-400MW, with a commercial operation target of Q4 2027 
    • Sadah wind IPP: Located in Sadah in the Dhofar Governorate, it will have a capacity of 81MW-99MW and is due for commercial operation in Q4 2027

    READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF

    UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge

    Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:

    > PROJECTS MARKET: GCC projects market collapses
    > GULF PROJECTS INDEX: Gulf projects index continues climb
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14211645/main.gif
    Edward James