Blockade impact on Qatar fading but risks remain: IMF
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.
In a report released late on March 5, 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 $40 billion 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.
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.
At 2.1 percent gross domestic product growth in 2017 was only slightly down on the 2.2 percent registered in 2016.
The budget deficit narrowed to 6.0 percent of GDP compared with 9.2 percent in 2016.
An escalation of the rift with Saudi Arabia and its allies could adversely affect external funding and growth, the IMF warned, adding that the banking system had to adjust to a new funding model.