Qatar’s August PMI Climb Indicates ‘Accelerating’ Non-Oil Private Sector Activity: Oxford Economics

Qatar’s PMI climbing to 51.9 in August indicates accelerating non-oil private sector activity in the country, according to Oxford Economics.

Last month, the PMI climbed to 51.9, which Oxford Economics noted is “fuelled by the fastest job creation and employment growth in the region”.

Business activity in the GCC’s non-oil private sector continued to strengthen in August, Oxford Economics said.

The UAE’s PMI rose to 53.3 from July’s four-year low of 52.9, driven by faster output growth. Saudi Arabia’s PMI edged up slightly to 56.4, supported by stronger client demand and infrastructure projects.

“Overall, the GCC's non-oil private sector has seen sustained expansion this year, and we expect 4% growth in the region's non-oil output this year,” Oxford Economics said.

In Saudi Arabia, credit growth slowed to 15.2% y/y in August but remained well above deposit growth of 8.4%. A sharper drop in mortgage lending suggests softer real estate activity, although consumer credit stayed strong.

“We expect early interest rate cuts to support credit demand, likely pushing the average loan-to-deposit ratio to a new high. This could raise liquidity concerns in the coming months, especially if deposit growth continues to lag,” Oxford Economics noted.

In a recent report the researcher noted Qatar's fiscal balance is estimated to scale up to 5.4% (of country’s GDP) in 2026 from 1.8% this year.

A growing fiscal balance signals improved macroeconomic stability and a stronger ability to manage government debt in the country, an analyst noted.

In an indication of the country’s level of international competitiveness, Qatar’s current account will improve further reaching 18.3% of the country’s GDP in 2026, from 17.5% this year.

Qatar’s real GDP growth has been forecast at 2.7% year-on-year (y-o-y) this year, rising to 4.8% in 2026.

Inflation has been forecast at 0.4% this year and 2.8% in 2026.

In its last country report, Oxford Economics noted Qatar’s GDP growth “will more than double” in 2026-2027, with both the energy and non-energy sectors contributing positively this year and beyond, according to Oxford Economics.