Significant LNG Expansion To Help Qatar’s Growth To Almost Double in 2026: ICAEW

Qatar's GDP (gross domestic product) growth is seen nearly doubling to 4.8% in 2026 on "significant" liquefied natural gas (LNG) output through North Field expansion, boosting fiscal surpluses and supporting business optimism, according to the Institute of Chartered Accountants of England and Wales (ICAEW).

"We project Qatar’s GDP growth at 2.7% for this year and 4.8% for 2026," said the ICAEW Economic Insight Q3 2025 report, produced by Oxford Economics.

Industrial output data for the second quarter or Q2 showed a 2.4% year-on-year growth, spurred by stronger mining production, although this comes off a low base from last year, said the economic update.

The July report from the Gas Exporting Countries Forum showed LNG production trends are supportive of exports and "we think activity will improve in the remainder of the year, before surging in 2026 as planned projects are completed."

Qatar targets LNG capacity target of 142mn tonnes per annum (Mtpa) by end-2030; up nearly 85% from the current 77 Mtpa, and up 13% on the intermediate target of 126 Mtpa by 2027.

The first production boost will come from the North Field East project by mid-2026, followed by the North Field South phase of the expansion. The North Field West phase is in its early stages, with construction likely to begin in 2027.

The expansion of the North Field gas project means the energy sector will play a more prominent role in the next five years, boosting the government's ability to support the economy, according to the update.

"We expect Qatar to run a budget surplus of QR14.1bn (1.7% of GDP) this year and see the surplus more than tripling in 2026, thanks to the LNG production boost," ICAEW said.

This is despite a cumulative deficit of QR1.3bn in the first half (H1), 2025; reflecting a rise in public spending against the backdrop of hydrocarbon revenue headwinds, it said.

Businesses remain optimistic about the outlook despite uncertainty over demand and recent PMI (purchasing managers’ index) prints have held above the H1 average of 51.1, owing to ongoing labour market strength,

"We continue to project an expansion of 3.6% in the non-energy economy this year and expect a similar pace of growth in 2026," it said.

The outlook continues to benefit from improvements in the regulatory framework and business environment, which have helped elevate the country's competitiveness ranking by two places to ninth globally in the latest IMD competitiveness index.

Forecasting Qatar’s inflation to average 0.4% this year but set to rise above 2% in 2026; it said Qatar has the second-lowest rate of inflation in the Gulf Co-operation Council (GCC) region, behind that of Bahrain. Food and communication are the key drivers of Qatar’s inflation, it said.

Finding that prices are lower than last year across most of the CPI (consumer price index) basket, though the drag from the housing and utilities category "is easing, albeit remaining substantial", it said "we expect the impact of these disinflationary forces to gradually fade over time."

With the US Federal Reserve resuming interest rate cuts in September and pencilling in a cumulative reduction of 125 basis points by end-2026, it said Qatar Central Bank is slated to follow suit, which will support credit expansion and spending.