Qatar plans to spend $49 billion in 2012-13
QATAR plans to boost government spending by 27 percent in the fiscal year that began in April, including wages, social services and infrastructure, but it expects to see a comfortable surplus, state news agency QNA reported on Tuesday.
Qatar, the world’s top liquefied natural gas (LNG) exporter, projects record high expenditures of QR178 billion ($49 billion) for the fiscal year, above the 140 billion planned for 2011-12. The country, which is due to host the soccer World Cup in 2022, has pencilled in revenue of QR206 billion, a 26 percent rise from the previous year’s budget plan and a surplus of QR28 billion, or 4.4 percent of 2011 gross domestic product, according to Reuters calculations.
The government expects to see a fiscal surplus of 8 percent of GDP in the current fiscal year, up from 6.7 percent in 2011-12, QNA said. Qatar is less conservative in its oil price assumption this fiscal year as the budget is based on an average crude price of $65 per barrel, above $55 in previous two years. Brent crude is now around $107 per barrel, near five-month lows.
Qatar, a major global investor through its sovereign wealth fund, has yet to release budget data for 2011-12. Funds allocated for public sector salaries soared 48 percent to QR37 billion in the 2012-13 budget, accounting for about a fifth of the overall plan, QNA said. In September, Qatar, which has avoided the social unrest that rocked the Arab world last year, raised basic salaries and social benefits for state civilian employees by 60 percent, while military staff received 50-120 percent increases.
The International Monetary Fund has said salary and pension hikes would add an estimated $1.6 billion to government expenditure in 2011-12, but the actual fiscal balance was still projected to book a surplus of over 7 percent of GDP in 2011-12. The authorities do not expect any further one-off rises in current expenditure, and aim to allocate 40 percent of the total spending toward capital expenditure over the medium term, the Fund said after concluding consultations with Qatar in January.
“Fiscal policy must continue to maintain a careful balance between spending on infrastructure to sustain non-inflationary growth, and saving and investing hydrocarbon surpluses abroad to generate sufficient income to finance future budgets,” the IMF also said.
The country of 1.7 million people, which pegs its riyal to the US dollar, has outlined public investment plans worth $95 billion over five years to 2016, ahead of the World Cup. That includes $11 billion on a new international airport, $5.5 billion on a deep-water seaport and $1 billion for a transport corridor in Doha, as well as $20 billion on roads.
It plans to spend QR62 billion ($17 billion) on public projects in 2012-13, up 7 percent from the previous plan, QNA said.
Qatar’s economic growth is expected to slow to 6.6 percent this year as the impact of two decades of gas output expansion fades, largely due to its self-imposed moratorium on new hydrocarbon projects to conserve resources, according to the latest Reuters poll of analysts in March.