World Cup to Boost the GCC’s Economy Further

How Will The 2022 FIFA World Cup Benefit the GCC Economy?

The FIFA 2022 World Cup is expected to gather more than 1.2 million spectators, which will be advantageous for the economies of the Gulf Cooperation Council. This prediction comes from S&P Ratings.

This influx will result in a 1.5-fold increase in Qatar’s population, boosting its economy in the short run.

The logistical challenges of staging one of the most significant sporting events in history would also likely have a positive economic knock-on effect on the other GCC nations.

Outside of Qatar, Dubai is said to benefit the most because of its proximity, thriving tourism industry, airline connections, and policies on multiple-entry tourist visas.

Qatar’s Economy Predictions

But is this just a blip on Qatar’s economic radar? The survey predicted that the economy would slow down after the world championship.

Oversupply in the hotel and real estate industries might moderate the economy’s growth, but it’s unlikely to affect the quality of assets in the banking sector.

The immediate impact of the World Cup is anticipated to be favourable, but mostly short-lived, not hurting Qatar’s economic development prospects in the medium term,” the poll study states.

An Overview of Qatar’s Economy

S&P recently raised Qatar’s credit rating from “AA-” to “AA” based on the country’s declining debt burden and the projected increase in tax revenue brought on by the $30 billion North Field Expansion project.

Qatar’s gross domestic product is projected to increase significantly from 2021 to 2022 by 4.8 per cent. The World Cup’s increased economic activity and the ongoing recovery following the lifting of the restrictions connected to COVID-19 may have contributed to this growth.

GDP growth outside the oil sector is anticipated to rise from 3% in 2021 to 8% in 2022. However, there is a small catch. According to media sources, office hours may be restricted during the event, which would hamper non-oil growth.

Because the oil sector, which accounts for around 65 per cent of real GDP, is expected to grow flat, its entire projection is reduced.

Qatar’s gas output is also predicted to rise significantly due to the completion of the NFE project phases in 2025. As a result, Qatar Energy could enhance its capacity to produce liquefied natural gas from 77 million tonnes per year (mtpa) to 109 mtpa by 2025 and 126 mtpa by 2027.

To prepare for the World Cup and as part of Qatar National Vision 2030, the authorities are working on a 10-year project roadmap for 2015 through 2024. The government is expected to spend an average of 13% of GDP on capital projects between 2015 and 2022.

As part of the projects, metro stations, roads, hospitals, sewage systems, and schools have all been built. It stated that even without the World Cup, Investors would have invested in these regions. S&P estimates that direct spending on athletic facilities for World Cup events may account for 3% of GDP.

Foreign Investment in the GCC

Qatar is competing with the other GCC countries for foreign investment. Dubai is already a well-established regional economic hub, despite Saudi Arabia having a much larger population and, thus, a captive market.

By 2030, Qatar wants to bring in 6 million tourists annually as part of its long-term economic strategy. According to projections, the Arab nation welcomed 0.6 million foreign visitors in 2021 and 0.7 million in the first half of 2022. Still, less than the 2.1 million guests received in 2019 were travellers.