Qatar's economy is on the downward pitch, with losses multiplying with every passing day. The diplomatic and economic boycott by Saudi Arabia and other countries is hurting Qatar to the hilt. With more countries expected to join the boycott, accumulated losses to the country is expected to push Qatar's economy to an even bigger crisis, the biggest in its history. The City Group has warned that there could be huge threats to Qatar's economy and finances if the diplomatic standoff persists. Steep price hikes and dangers of inflation are some of the major risks. As Qatar is a major importer of foodstuff, even prices of basic edibles are expected to hit the roof. There would be a steep decline in economic growth. Construction would come to a crawl as imports of building material would be severely affected. One of the high-profile casualties would be the World Cup 2022. Another likely casualty is Qatar Airways, already reeling under the crisis, of the doing of its own home country. Economist Ahmad Al-Shahri said that the economic implications of severing ties with Qatar would be enormous. The cost of borrowing to deal with the budget deficit would be huge, and investments and movement of funds would see a steep decline. Ahmad Al-Shahri said that the operational cost of Qatari Airways would increase multifold in addition to a rapid fall in the number of its passengers. There are estimates which suggest that the company would lose 30 percent of its revenues directly. He said that most of the flights to South East Asia flew through UAE airspace. Diverting the air route would push the company out of competition. Moreover, it would have to divert its flight path to Africa as well, with Saudi airspace out of bounds. Al-Shahri said that in the contracting and construction sector also, Qatar depends on the land route for building materials from Saudi Arabia. Therefore, it would have to bear heavy losses here as well. Doha is estimated to be spending as much as Qatari Riyal 750 billion to complete the World Cup infrastructure. Qatar might even lose the right to host it as many foreign contracting companies would possibly pull out under the changed political and economic circumstances. Fahad bin Sibyan Al-Sulami, member of the board of directors of the Jeddah Chamber of Commerce, expects Qatar's losses to increase significantly as it depends on imports from the Kingdom and the UAE. These imports are either the products of these two countries or are items which are re-exported through its land routes from Saudi territories. Statistics indicate that the volume of livestock exports from the Kingdom and UAE to Qatar was more than US$ 416 million in 2015. Export of food products from these two countries to Qatar was US$ 310 million annually, and vegetables and fruits, US$ 178 million. Dr. Salim Ba'ajaja, Economics Professor, Jeddah University, said that the losses to Qatar would not be simple as it is dependent on imports for all its needs from the neighboring countries, particularly from the Kingdom and the UAE. Due to the severing of these relations all trade has stopped. It will reflect in the budget of Qatar, which would try to find alternative resources. It will be difficult for it as the ambit of boycott is vast, as there are companies along with the countries that have joined the boycott. Dr. Ba'ajaja said that the first indication of the huge loss was evident in the Qatar financial market as soon as the announcement to cut relations was announced.
