The economy appears to weather the ongoing political tensions with the other Arab states fairly well. Real GDP growth maintained solid growth momentum in 2017 despite the continued Saudi Arabia-led embargo that began in June last year. Growth recovered to +1.9% y/y in Q3 2017 (after dropping to +0.3% in Q2), thanks to a rebound in manufacturing (+5.1% y/y) and continued strong expansion in the construction sector (+14.7% y/y), despite the suspension of Qatar's land border with Saudi Arabia which initially affected the imports of construction materials. And recently the Ministry of Economy and Commerce estimated growth to have reached around +2% in 2017 as a whole, suggesting that economic activity continued to recover in Q4. We forecast growth to pick up to +2.5% in 2018 on the back of rising gas production (oil production will remain curtailed due to the extension of the OPEC deal through year-end) and increased infrastructure investment for the FIFA World Cup in 2022.