(Bloomberg) -- Growing natural gas production and a rebound in domestic demand will help Qatar return to economic growth next year, according to the International Monetary Fund's latest assessment of the country's financial health.
Gross domestic product will grow 2.7% in 2021 following a contraction of 2.5% this year, the IMF said in a statement following virtual meetings held with Qatari officials Dec. 6-14. It added that risks to this forecast mainly emanated from the global economic outlook.
While Qatar is projecting it will run a budget deficit next year -- a shortfall the IMF pegs at 6% of the country's GDP -- the fund said that the country's decision to reprioritize some spending has kept the fiscal gap in check.
“Postponing unawarded contracts on non-core, non-World Cup related investment projects and savings in operating spending helped to mitigate the impact from the lower oil price and a slowdown in economic activity,” the IMF said.
Read more: Qatar Set for Biggest Budget Deficit Since Gulf Spat in 2017
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