Saudi-led sanctions cause Qatar's slowest economic growth since 1995

Saudi-led sanctions against Qatar appear to be having a major impact.

The blockaded emirate faces the slowest economic growth in more than 20 years, according to recent predictions. The countries GDP is only expected to grow by 2.5 percent in 2017, the lowest percentage since 1995, according to Huff Post.

And the numbers are down 0.6 percent from June predictions, made before the Saudi-led sanctions were implemented. Bahrain, the United Arab Emirates, and Egypt have joined Saudi Arabia in isolating Qatar economically and diplomatically since June, accusing the emirate of supporting and funding terrorism.

"The early signs are that the sanctions dealt a damaging blow to Qatar’s economy in June. The impact appears to be temporary, but it will still result in weaker growth," William Jackson of Capital Economics told World Oil.

Although Qatar's exports of natural gas have not been affected by the crisis, projects funded by the Gulf Cooperation Council (GCC) have suffered significantly. These include food-processing and port facilities, with such economic activity facing an entirely uncertain future.

But experts don't believe the economic impact will be felt by Qatar for the long-term.

"We expect the disruptive impact of the boycott to have evaporated by next year," Farouk Soussa of Citigroup Middle East said. 

"Trade routes will have been fully reconfigured, confidence will have been restored, building will recommence — all possibly against a backdrop of a continued boycott, but one that the economy has adapted to," he said.

While Qatar may be feeling the impact of the Saudi-led blockade, its economic growth forecast is still better than that of its neighbors.

In fact, out of all the six GCC nations, Qatar's economy still appears to be expanding the fastest. The emirate is predicted to grow 0.5 percent more than Saudi Arabia and a full 2 percent more than the UAE.

With the World Cup on the horizon and new trade deals constantly in the works, Qatar may continue to weather the blockade for decades to come. In July, Qatar's finance minister boasted that the emirate is far too rich to be concerned about a trade blockade from its former allies.

"We have sovereign wealth funds of 250 per cent of gross domestic product, we have Qatar Central Bank reserves, and we have a ministry of finance strategic reserve," Finance Minister Ali Sharif al-Emadi said, according to The Australian.

"We are the fastest growing country in the region, 40 per cent faster than the nearest GCC country," he said.