DUBAI: Qatar's economy grew 5.0 percent from a year earlier in inflation-adjusted terms during the second quarter of 2012, as strong expansion in non-energy sectors including finance and construction largely offset a slacker energy sector, government figures showed on Saturday.
Gross domestic product growth slowed from the first quarter, when it was 6.9 percent year-on-year. Second-quarter GDP climbed 2.5 percent from the first quarter, the figures released by Qatar Statistics Authority showed.
The OPEC producer's economy is dominated by energy production, which accounts for roughly half of output. But that sector grew in real terms by only 0.8 percent from a year earlier in the second quarter and shrank 0.1 percent from the first quarter, because of softer global oil prices.
By contrast, the financial services sector grew 12.1 percent from a year earlier, transport and communications output rose 18.0 percent, and the construction sector increased 10.0 percent. Qatar has embarked on a major infrastructure building program, partly in preparation to host the 2022 soccer World Cup.
In June, Qatar's state planning authority said it expected economic growth of 6.2 percent this year, slowing to 4.5 percent in 2013, the weakest rate in a decade.
Last year, growth was 14.1 percent. The slowdown is due to the fading impact of two decades of rapid expansion of natural gas production.
Meanwhile, Qatar, a major investor in US and European assets, worries that haphazard attempts by countries to shore up their economies could weaken the dollar and the euro, its prime minister said.
"What should happen is we should have a full package with a full strategy to solve the problems," Sheikh Hamad bin Jassim Al-Thani, who also heads the country's sovereign wealth fund, Qatar Investment Authority (QIA), told US financial broadcaster CNBC in an interview aired on Friday.
This month the US Federal Reserve announced a program of heavy purchases of mortgage-backed securities in an effort to boost employment, but the US government has so far failed to reassure financial markets that it has an effective plan to cut its budget deficit and boost economic growth.
The European Central Bank has also said it will buy bonds to protect economies from the euro zone debt crisis, but governments of weak countries such as Greece and Spain have not persuaded investors their debts can be cut to safe levels.
Sheikh Hamad said the central banks were right to act to prevent worse crises, but added: "With more printing money, without having a strategy, I believe the value of the money will go down very soon."
He did not give details of the economic measures which he believed Western countries should be taking, but said the risk of further volatility in markets was making investors such as Qatar cautious. Analysts have estimated the size of Qatar's sovereign wealth fund at around $100 billion.
"There are some questions with no answer up to now," he told CNBC.
However, Sheikh Hamad added that Qatar would retain holdings of strategic stocks and buy when prices dropped, and that it would continue to make new investments in promising assets.
He said he was optimistic about the longer-term future of the banking industry, since better regulation and capital-raising would strengthen banks after some years. He noted that QIA had a strategic stake in Credit Suisse, and owned about 1 percent of Bank of America and 5 percent of Santander Brasil among other banks.
The gas-rich Gulf state has bought more than $5 billion or $6 billion of real estate assets over the last four to five months, mostly in the United States and Europe, Sheikh Hamad said. "If there is some good opportunity, why not," he said of investing in crisis-hit Europe.
Qatar, which owns just over 12 percent of Xstrata, will help to determine the success or failure of Glencore's $32 billion offer for the miner.
Glencore was forced earlier this month to raise its bid price, offering 3.05 new shares for every Xstrata share instead of 2.8, after Qatari pressure. As a condition, however, Glencore imposed its own chief executive and largest single shareholder, Ivan Glasenberg, at the head of the combined group.
Xstrata's directors face a Monday deadline to decide their position on Glencore's higher offer.
Sheikh Hamad told CNBC: "We have no problem with the new price," but added, "Other aspects (of the proposed deal) have to be studied." He declined to elaborate.
Earlier this week Reuters quoted banking sources as saying Qatar Holding, one of the country's investment vehicles, was in advanced talks to buy a 49-percent stake in Brazilian billionaire Eike Batista's gold firm AUX for about $2 billion.
Qatar Holding subsequently issued a statement denying that such talks had taken place.
However, asked about Qatar's intentions towards AUX, Sheikh Hamad told CNBC: "We're studying it. Still there is no commitment from our side." Details of the proposal need to be presented to the board, he added without elaborating.
Nonoil sectors boost Qatar GDP by 5% in Q2
