Economic blockade on Qatar by Arab quartet fading: IMF

Dubai, March 7: The economic and financial impact on Qatar put by Arab quartet including United Arab Emirates, Saudi Arabia, Bahrain and Egypt led blockade is fading, but some risks for the emirate remain. This was said by the International Monetary Fund (IMF) in a report that was released on Monday.

 

Notably, it has been over nine months, after the Arab quartet including United Arab Emirates, Saudi Arabia, Bahrain and Egypt put a stringent economic blockade on Qatar alleging Doha supported terrorism.

IMF in a report said that the economic and financial impact on Qatar of a nine-month Saudi-led blockade is fading, but some risks for the emirate remain. The IMF also said that 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 sovereign wealth fund,” the IMF added. The International Monetary Fund also stated that although Qatar’s economy and banking and financial systems remain sound, there are still some risks.

IMF said, “The main risks relate to the possibility of lower hydrocarbon prices, the implementation of planned fiscal measures and uncertainty associated with the lingering impact of the diplomatic rift.” 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.

Importantly, in the month of June last year, Saudi Arabia, the UAE, Bahrain, Egypt and several other nations cut ties with Qatar and imposed stringent economic sanctions on it over supporting extremism. On the other side, Qatar denied all their allegations saying that they never supported Islamist militants and Shi'ite Iran.

Later, Saudi and its allies issued a 13-point list of demands to end the rift on June 22 and gave Qatar 10 days to comply. However, earlier Qatar rejected to fulfill the demands. The controversial Qatar World Cup will take place Nov. 21-Dec. 18 in 2022.