More than six months into the isolation of Qatar by its neighbours in the Gulf Cooperation Council (GCC), the small oil-and gas-rich Arab country is swimming in troubled economic waters, but not without buoys.

Having the richest gas reserve in the world, a major share in the global liquefied natural gas (LNG) market and armed with huge foreign exchange reserves, Qatar is paddling through the waves amid the diplomatic and trade blockade imposed on 5 June by Saudi Arabia, along with Bahrain and UAE in the GCC, as well as Egypt in north Africa, because of Doha’s alleged support of terrorism in the Middle East.

The GCC’s two other member countries – Kuwait and Oman – on the other hand, remain on friendly terms with Qatar.

Qatar’s point of vulnerability amid these developments lies in imports as the economy relies on neighbouring countries for a whole gamut of commodities and services, even as basic as food, and is now being forced to look farther afield for new sources, which meant higher cost.

While Saudi Arabia, Bahrain, the UAE and Egypt “constitute a small share of destination markets for Qatar’s exports” and not a major source of the country’s foreign investments, “the boycott and the disruption of economic ties led initially to a sharp drop in imports, requiring a (costly) diversion of merchandise and services trade and financial flows through other neighboring countries,” the World Bank said in its October 2017 Qatar Economic Outlook.

According to a BBC report, about 40% of Qatar’s food came in though the land border with Saudi Arabia.

Three months after the GCC blockade took effect, Qatar inaugurated on 5 September its $7.4bn Hamad port, which is located south of Doha, with the opening of new trade routes via Oman to bypass the usual shipping routes that go through the UAE ports.

The first phase of the port’s development was completed in late 2016, with completion of the second and third phases brought forward to 2020 from 2030, according to Qatar’s Ministry of Transportation and Communication.

Around 2.2m tonnes/year of petrochemical products are exported through Hamad Port, equivalent to 150,000 containers and representing 75% of Qatar’s total container exports.

“The port... will break the shackles of any restrictions imposed on our economy,” Qatari transport minister Jassim bin Saif al-Sulaiti was quoted by news agency Reuters as saying during Hamad port’s inauguration.

Once the three phases of development are completed, Hamad port is expected to have three container terminals with a combined annual capacity of more than 6m containers.

“Efforts to diversify sources of imports and external financing and enhance domestic food processing are accelerating. As a result of the authorities’ quick response, some trade has been re-routed and alternative sources of food supply have been established, allaying fears of potential shortages,” the International Monetary Fund (IMF) said in its report dated 30 August, after completing a staff visit to Qatar.

Qatar’s economy has slowed down in the second quarter, with annualized growth decelerating to 0.6% from 2.5% in January to March 2017, according to the country’s Ministry of Development Planning and Statistics.

A more pronounced deceleration in economic growth may be in the offing in the second half as it would reflect the impact of the GCC rift.

“The economy is struggling to regain momentum following Q2’s anaemic economic growth mostly due to a poor performance in the oil and gas sector,” research firm FocusEconomics said in a report dated 31 October.

“Although the impact of the economic blockade by Saudi Arabia and its allies had a limited impact in Q2, as the embargo was implemented in June, the consequences could be harsher in the second half of the year,” it said.

Qatar’s economy is projected to post a 2017 growth of 1.8%, slower than the 2.2% recorded last year and the 3.6% pace of expansion in 2015, according to consensus forecasts of various analysts in Focus Economics' November report on the Middle East and North Africa (MENA).

Full-year imports are expected to contract by 5.7% from a 12.1% growth in 2016. The country’s annual imports are pegged at around $30bn.