Qatar’s swift policy response to COVID-19 mitigated economic impact: IMF

The International Monetary Fund (IMF) has credited Qatar for its swift COVID-19 response which enabled it to mitigate the health and economic fallout while also facilitating it to sustain economic confidence and dampen the impact of the shocks on the market and households. 

IMF’s observations were made during a series of virtual meetings conducted from December 6-14 attended by a team lead by Mercedes Vera-Martin from the international body to discuss recent economic and financial developments and outlook.

“The (Qatari) authorities’ policy response has mitigated the economic impact of the shocks,” the body observed after its Article IV consultation with Qatar.

Qatar’s policy response to the pandemic revolved around its $20.6 billion package to support the economy. One of the key aspects of the policy was the Qatar Central Bank’s (QCB) zero-percent repo facility ($13.73 billion) which promoted sufficient liquidity in the banking system which, along with the apex bank’s lowered policy rates, has backed credit to the private sector.

Qatar Development Bank’s $1.37 billion credit guarantee scheme has also supported small and medium enterprises (SMEs) and protected jobs.

The country also rolled out a series of policies allowing households and businesses to defer loan repayments until the end of the year along with waivers on rent and utility charges.

“These measures, along with others to ensure salary payments and/or basic allowances to workers and to reduce customs tariffs on critical supplies (all totaling $580 million), helped sustain economic confidence, dampen the impact of the shocks on businesses and households, and sustain the healthcare response,” IMF representation expressed in its address.

Qatar’s swift response built on strict prevention and containment measures along with one of the highest per-capita testing rates in the world allowed the country to resume all economic activities from September.

Referring to the latest financial soundness indicators, the international body observed that the Qatari banking sector remains well-capitalized and liquid.