DOHA: Qatar’s budget surplus is expected to reach QR40bn by the end of the current fiscal. The surplus was QR27bn during the second quarter, Al Sharq reported.
The country’s GDP is expected to touch QR200bn by the end of the final quarter of the current fiscal. In the second and third quarters, it reached QR180bn and QR185bn, respectively.
Oil prices rose to $105 per barrel against the budget assumption of $65 per barrel. This has led to the significant surge in the surplus. The high oil prices and higher-than expected demand helped boost the surplus, Al Sharq quoted banking sources as saying.
The Ministry of Finance is giving final touches to the 2014-15 budget. The ministry has already received reports from various ministries and government bodies regarding their projects for the new financial year, it said.
IMF in its latest report on Qatar noted the government budget continues to post large surpluses. The financial year 2012-13 budget surplus increased to 9 percent of GDP on the back of strong growth in revenues, despite a substantial overrun in current expenditures.
Gross government debt for fiscal year 2013-14 is projected at 33 percent of GDP, with the authorities issuing T-bills and T-bonds for financial market development and liquidity management purposes.
Qatar’s GDP growth slowed from 13 percent in 2011 to 6.2 percent in 2012, largely as a result of the long-standing self-imposed moratorium on additional hydrocarbon production from the North Field. Growth is estimated to have remained around 6 percent in 2013, driven by a 10 percent expansion in the non-hydrocarbon sector, particularly construction, transport, communications, and finance. The non-hydrocarbon sector now accounts for almost one-half of the economy.
Negative spillovers from the global slowdown have been limited since the tight LNG market and supply disruptions among other oil producers have kept hydrocarbon prices high.
The Fund noted that Qatar ranks 13th in the Global Competitiveness Index, the highest in the GCC region, but it lags behind in terms of SME development and educational quality. The SME sector contributes only 10 percent of GDP, compared with almost 30 percent in the entire MENA region.
The authorities have stepped up their diversification efforts through the Qatar Development Bank and Enterprise Qatar. To support greater private sector activity, the Ministry of Finance has started outsourcing some activities and privatising selected assets.