Qatar’s economy is experiencing the largest wave of stock market declines

With US financial firm S&P warning of a decline in liquidity in Qatar and threats to increase banks’ external debt to unprecedented levels, the Qatari stock market has witnessed a sharp decline, the largest in two years, amid fears that the country might fall into an economic recession.

Recession fears

According to Reuters, Qatari markets concluded trading Thursday for the largest weekly drop in two years due to fears of economic recession.

Qatari stocks posted the highest fall in the Gulf region on Thursday, hitting a record low for more than two years as investors feared that a further rise in interest rates in the face of decades-old inflation would push economies into recession.

US Federal Reserve Chairman Jerome Powell said Wednesday: The central bank is not trying to engineer a recession to stop inflation, but it is fully committed to keeping prices under control even if it risks an economic recession.

A Reuters poll showed that the Fed will offer another 75 basis-point rate hike in July, followed by a half-percentage-point rise in September, and will not fall back to a quarter-percentage-point move until November at the earliest.

Qatari markets collapse

According to the International Agency, the main index in Qatar closed down 1.6%, with overall stocks falling, and Qatar Industries Petrochemical Industries down 4.4%.

The index recorded a weekly loss of 6.4%, the biggest loss in a week since March 2020.

Eman Al-Ayyaf, CEO of EA Trading said: “Qatari stocks are volatile and could register further price corrections after a difficult week”.

The agency said investors in Qatar are pessimistic and natural gas prices have dropped.

Al-Ayyaf said the Qatari market remains highly vulnerable to another wave of decline as international investors sell their products.