$17 billion for the economy and a boom for the Qatari stock market: Qatar reaps the benefits of investment at the 2022 FIFA World Cup

Qatar deployed the biggest-ever budget for an edition of the FIFA World Cup, with over $220 billion invested in infrastructure projects, such as the eight stadiums where the 64 games are played, a new metro line, a modernization of the Hamad International Airport or a new port built from the scratch.

The investments started when the Middle East country was awarded the hosting of the tournament, in 2010, and align perfectly with the Qatar 2030 Vision project, which aims at transforming Qatar into an advanced society capable of achieving sustainable development and securing a high standard of living for its people for generations to come.

But what is the short-term impact of organizing such a huge tournament, which attracted over 1.2 million people in the country?

According to a new report aptly named “Will the World Cup bring home an economic win for Qatar?”, FocusEconomics, a leading provider of consensus economic forecasts, anticipates growth in Qatar’s GDP in the fourth trimester of 2022, with a boom of 4.1% year-on-year from 2021.

“We anticipate an acceleration in GDP growth this year as non-hydrocarbon sectors such as tourism, transport, and construction benefit from Qatar’s hosting of the World Cup, which is expected to bring in about 1.2 million tourists. Economic growth thereafter is likely to be relatively soft through 2025. Government investment, much of which is outside the hydrocarbon sector, will gradually decline, with major infrastructure projects nearing completion,”

“In the fourth trimester of 2022, the hosting of the tournament will have immediate positive effects on Qatar from the perspectives of real GDP growth and the balance of payments via higher consumption, government spending, and services exports,” says the report.

Qatar has also recorded $4bn of foreign inflows in the first 10 months of this year alone, with stock market experts saying that Qatar’s stock market outperformed its peers in the run-in and during the competition and is expected to grow even after the conclusion of the FIFA World Cup on 18 December.

In a turbulent year on the stock markets throughout the world, caused by the onset of the Covid-19 pandemic and the geopolitical issues in Europe, the QSE Index, which measures the 20 largest and most liquid stocks on the Qatar Stock Exchange (QSE), appreciated as much as 24.7 percent from the start of 2022 to April 11, 2022, but then declined to almost flattish territory in late June and was again up by 12.1 percent year to date on September 5, 2022.

“If we look at the performance of Qatar’s stock market in the last five years when preparations related to the World Cup accelerated in terms of the pace of work, Qatar’s stock market is up more than 50 percent,” said Akber Khan, senior director of asset management at Doha-based Al Rayan Investment, according to Al Jazeera.

The World Cup gains on the QSE are expected to carry into the next year as well, primarily from construction, real estate, tourism, and retail spending that trickles down to the exchange-listed companies and the broader economy as a whole.

But as Qatar shifts its focus to tourism, the new infrastructure built, especially luxurious hotels and the new city, Lusail, helps attract new tourists both right now and in the future, with the investments paying off.

The Qatari government is eyeing six million visitors by 2030 when the Qatar Vision 2030 project is completed, a three-fold multiplication from the two million visitors recorded in 2019.

“Over one million tourists are expected to fill these new structures during the month in which the FIFA World Cup is played, providing a near-term boon to the economy, especially thanks to increased spending on food and hospitality support services. Increased domestic demand will also drive inflation up. Our Consensus Forecast expects inflation to more than double from 2021’s figure an average of 4.6 percent in 2022, well above the GCC average,” the FocusEconomics report said.

But how much money will Qatar rake up after the FIFA World Cup? The estimates are quite good.

“Overall, official estimates are that the World Cup will generate $17 billion for the Qatari economy while it takes place,” the report said.