The actual data of Qatar’s budget for the first nine months of 2022 issued by the Ministry of Finance showed a strong financial surplus that exceeded QR 77 billion compared to QR4.9 billion during the same period in 2021, reminding of the high surplus levels achieved in fiscal years 2012 (QR 77 billion), 2013 (QR 106.3 billion), and 2014 (QR 108.6 billion).
The 2022 budget surplus is mainly due to the remarkable control over expenditures and the rise in revenues with the recovery seen in oil prices. During the past few years, the budget figures saw some limited margin surplus in 2021 (QR 1.6 billion), 2019 (QR 7 billion), and 2018 (QR 15 billion); and a deficit in 2015 (QR 4.2 billion), 2020 (QR 10.4 billion), 2017 (QR 44.7 billion), and 2016 (QR 50.8 billion) - the biggest deficit in the last 10 years.
When approving the State’s budget for the fiscal year 2022, the estimates showed an expected deficit of QR8.3 billion, which Minister of Finance HE Ali bin Ahmed Al Kuwari attributed to the operational expenditure (Opex) related to the World Cup activities, including security and operational expenses related to the FIFA World Cup Qatar 2022.
In this regard, the data issued by the Ministry of Finance showed that the total actual budget revenues - during the first 9 months of 2022 - reached QR232.6 billion, where QR193.9 billion came from oil and gas, and QR38.6 billion came from non-oil revenues - making it exceed the 2021total revenue of QR 193.7 billion.
The data indicated that the total expenditures in the same period amounted to QR155.2 billion, of which QR47.5 billion were for salaries and wages, QR51.2 billion for current expenses, QR3.4 billion for incidental capital, and QR 53.1 billion for major projects.
The quarterly comparison of the 2022 actual budget data indicated an increase of 31.85 percent in revenues and 1.17 percent in expenditures in the second quarter compared to the first quarter. The data also showed an increase of 26 percent in revenues and 0.78 percent in expenditures in the third quarter compared to the first quarter, while the comparison of the second and third quarters showed a 4.43 percent decrease in revenues and a 0.38 decrease in expenditures in the third quarter.
Professor of Economics at Qatar University Dr Rajab Al Ismail described the approach of benchmarking the oil prices in the State’s 2022 general budget and setting it at the level of $55 per barrel as positive, saying that it is a required approach so for the State to deal with the worst case scenarios, as programing a lower price compared to circulated prices enables dealing with market fluctuations more wisely and secures continuation of comfortable financing of the budget’s various items.
In his remarks to Qatar News Agency, Professor of Economics at Qatar University said that a slight profit margin in the budget is much better than a deficit, which may lead to a lack of financial discipline that impacts projects and programmed expenditures. As much bigger the profit margin compared to the budget reference rates, there will be progress in implementing the programmed plans and projects.
The 2022 State’s general budget was based on $55 per oil barrel as an average price, given the remarkable recovery of energy prices in global market markets. This approach aims to maintain the financial balance and limit the impacts of oil price fluctuations on public finance performance.
Dr. Ragab Ismail explained that Qatar has invested surpluses from oil and gas revenues in the budget in safe investment channels such as government bonds, in addition to the contributions and shares acquired by the Qatar Investment Authority in major successful international companies, whose revenues in turn feed the budget, in addition to the possibility of directing these surpluses to pay off various liabilities such as debts, according to the assessments adopted in this field.
He expected that the 2023 budget would be built on a reference oil price estimated at $55, similar to the figure approved in the current year, especially in light of the prices in global markets, which fluctuated in the last period between $75 and $80.
He pointed out that fiscal policies aim to achieve stability and boost economic growth.
The 2022 budget estimated total spending at QR204.3 billion, an increase of 4.9 percent over the 2021 budget. This increase in spending is mainly due to the temporary increase in operating expenses related to the activities of hosting the 2022 World Cup, as an amount of QR 74 billion has been allocated for major projects from the total expenditures of the general budget for the year 2022.
For his part, the economic analyst, Ahmed Aqel, said in a similar statement to (QNA), that “the surpluses that have been achieved during this year, so far, are very important, as they exceeded QR 77 billion, knowing that the expectations of the International Monetary Fund at the beginning of this year was at QR 45 billion.
He believed that the reason for this large increase in surpluses, especially in the second quarter (more than QR 33 billion) and the third (QR 30 billion), is the differences between the reference price in the budget for the year 2022, which was very conservative at USD 55 a barrel, and the oil price, which amounted to more than From $100 during the first nine or ten months of the year 2022, which allowed the budget to achieve very high and excellent surpluses.
He explained that the expenditures that were recorded during this period, which were rational and within the expected, and the rise in oil and gas prices are the main reasons for the surpluses achieved, and he expected that the size of the budget surplus in the fourth quarter would touch its counterpart in the first quarter (approximately QR 13 billion), which means that the surpluses achieved by the end of the year 2022, it will be a record and between QR90 and QR100 billion.
The infrastructure projects, the development of citizens lands, and projects to develop public services such as health and education received priority spending in the state’s general budget for the fiscal year 2022, in parallel with the states continued focus on the education and health sectors, while education allocations amounted to about QR17.8 billion, which represents 8.7 percent of the total expenditures, QR20 billion have been allocated to the health sector, which represents 9.8 percent of the total expenditures, which include more development projects and programs, in order to improve health care services provided in the country.