Qatar Economic Outlook Issue Number 13

Qatar Economic Outlook 2021 - 2023 
28 
Global Policy Related to 
Commodity Markets 
As mentioned earlier at the beginning of the 
report, administrative measures to contain 
Covid-19 during 2020, including preventive 
and 
precautionary 
measures, 
while 
mustering the health system’s capabilities to 
treat patients with the virus, contributed to: 
(1) the closure of many economic and social 
business activities, which reduced the supply 
and demand for goods and services, (2) the 
disruption of supply chains at the global level, 
and (3) the disruption of internal 
transportation, which led to a slowdown in 
business. On the other hand, the requirement 
to work-from-home increased the use of local 
and 
international 
telecommunication 
technologies. Thus, one of the most 
prominent results of these repercussions was 
the global layoff of millions of mostly blue-
collar or casual workers, which increased the 
unemployment rate around the world, and 
also contributed to the creation of a collective 
reluctance to engage in activities that 
required significant face-to-face interactions
and connection, especially service sector 
jobs, transport, as well as wholesale and 
retail trade activities. 
In order to confront such challenges, many 
governments around the world have 
implemented an integrated package of 
expansionary economic policies (financial 
and monetary), the most important among 
which are: increasing government spending, 
including providing financial incentives to 
individuals and companies, reducing taxes, 
reducing the bank interest rate, expanding 
the use of the monetary tool to quantitative 
easing (QE) by central banks (in particular, in 
advanced and emerging economies). The 
central banks allow themselves to use QE 
tool to buy securities (such as stocks, bonds, 
and treasury assets) from the government or 
commercial banks with the aim of increasing 
the money supply, which leads to lower 
interest rates because it provides easy 
money, which then reduces the returns of 
investors and savers in money market 
accounts, certificates of deposit, treasury 
bonds, and corporate bonds, forcing the 
owners of such funds to search for rewarding 
investments, even if they have high-risk 
outcome - which, in principle, will increase 
production and create new jobs, thus helping 
the economy move forward. 
While the new Omicron variant is pushing a 
number of countries to close borders, and 
introduces further uncertainties, it is 
necessary to focus on what has been 
achieved so far from the accumulated 
experience in treating infected patients,
administering measures necessary to limit 
the spread of the virus, and implementing 
expansionary economic policies to sustain 
economic activities, which all contributed to 
expediting the global economic recovery: (1) 
driven by growth in aggregate demand for 
both consumption and investment resulting 
from a gradual return to normalcy, and (2) 
supported by the availability of domestic 
liquidity and the continuation of expansionary 
economic policies. 
However, the continued slowdown in the 
production and supply of goods and services 
to meet aggregate demand due to ongoing 
disruptions caused by measures to contain 
mutations of COVID-19, continues to be 
evidenced by rising unemployment rates and 
the strangulation of supply chains and 
bottlenecks in ports, because social 
distancing measures compelled a reduction 
in workforce, added to which some 
companies used ports as free warehouse 
space due to logistics uncertainties that 

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