Modelling the Dynamic Relationship between Production of Crude Petroleum and Natural Gas and Gross Domestic Product in Qatar during the Period 2000–2022
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Abstract
The production of crude oil and natural gas is crucial for Qatar's economy as it supports its indicators of economic development. The gross domestic product (GDP) measures the value added by various economic sectors during a specific period and heavily relies on the surplus generated in Qatar's oil and natural gas sector for growth and development. It is projected that real GDP growth will range between 2% and 2.5% in 2023-2024, driven by strong domestic demand and the ongoing expansion in liquefied natural gas production. Inflation is expected to gradually decline to around 3%. In this study, we used a standardized approach to determine the impact of crude oil and natural gas production on Qatar's GDP. Our methodology involved analyzing data related to the production of crude oil and natural gas, as well as the gross domestic product (GDP) in Qatar. We then constructed a statistical and mathematical model that explains the long-term relationship between these variables. To establish the reliability of our model and interpret the relationship between the variables, we employed causal tests such as the Engle-Granger test and the vector autoregression (VAR) model. Through the response analysis of the model, we found a strong and statistically significant relationship between the production of crude oil and natural gas and Qatar's gross domestic product (GDP).
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Oil and gas productionGDP, Engle-Granger testVAR modelImpulse analysis
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