Qatar has taken extreme measures to prevent any type of financial loss that could possibly emerge from the impact of the global pandemic COVID-19. Among the measures taken are to support its private sector, and the measure is to an extent seen never before in Qatar.
In response to the pandemic, the country has announced a QR75bn stimulus plan, apart from injecting QR10bn into the stock market.
The Qatar Central Bank (QCB) directives to the banks were a shot in the arm for the country’s private sector. According to experts, the QCB decision will help in taking over the pay rolls for some companies that were really struggling, so that the workers do not get laid off.
Experts are of the opinion that the timely intervention by the government will help many companies exit their ‘frozen’ status immediately.
The Economic Consultant and Director, Bashir Al Kahlout, Al Byraq Centre for Economic and Financial Studies mentioned that QCB’s announcement is “literally a bailout package” not just for struggling private companies, but, for the whole banking system.
The six-month grace period announced to the private sector for repayment of their loans is a major relief for the struggling companies. The banks can benefit from QCB’s decision to bring down the Repo rate to zero, he said.
The Government’s decision to inject QR10bn into Qatari bourse is another major measure which has brought in huge confidence in the market. This decision will put the market in growth track, Al Kahlout said.
Under the stimulus package, the hospitality, aviation, food and transportation are some of the priority sectors, said the Doha-based economist, who further added that the food sector is the worst-hit by the global pandemic. The cargo charges have grown two to three folds. As the global supply chain is now disrupted, the sector will see huge volatility in prices, he said, adding that he hopes the government would intervene to fix the system.