Qatar's government expenditure growth is not to exceed non-hydrocarbon (NHC) gross domestic product (GDP) growth by 2030 as the country "develops a more sustainable and shock-resistant" medium-term fiscal framework.
This was enshrined in the recently launched Third National Development Strategy (NDS3), which has targeted a NHC growth of 4% and an overall fiscal balance of 5.5% of GDP by 2030.
On the sovereign expenditure growth, experts are of the view that the NDS3 is on the right track since structural efficiency is as important as economic diversification.
This comes amidst the Qatar National Vision (QNV) 2030’s intent to steer a large part of the economy towards non-energy sectors, especially knowledge-based economic opportunities.
In its latest Article IV consultation report on Qatar, the International Monetary had said the NDS3 would provide an opportunity to accelerate economic transformation towards a knowledge-based and inclusive economy supported by private-sector led growth.
Global credit rating agency Standard & Poor's had earlier said it expected the national development strategy projects to improve the economy’s productive capacity.
The NDS3, which defines bold and transformative initiatives and reforms designed to achieve the remaining QNV 2030 goals, also said the medium-term fiscal framework, characterised by diversified and stable sources of revenues and efficient and effective public expenditures, and by a resilient balance sheet, reflected in healthy debt levels.
Qatar aims to achieve an increased share of non-hydrocarbon government revenues, and achieving this will include strengthening tax administration capacity and efficiency, enhancing tax compliance, and implementing a proactive risk system using advanced technologies.
It highlighted that Qatar also aims to maintain a sustainable fiscal budget, reduce pro-cyclicality, and enhance public expenditure efficiency and effectiveness.
The expenditures in the fiscal year 2024 budget saw an increase by 1% from 2023 to QR200.9bn.
"To this end, Qatar has already established a medium-term fiscal framework and is in the process of implementing programme-based budgeting," it said, adding it will also better align planning and budgeting processes.
"We seek through this strategy to sustainably develop our economy to remain competitive amidst a turbulent and rapidly changing global landscape," HE the Prime Minister and Minister of Foreign Affairs Mohamed bin Abdulrahman bin Jassim al-Thani had said at the launch.
The NDS3 said Qatar aims to manage public debt and contingent liabilities to generate sufficient fiscal space for economic downturns.
The NDS3 will enhance the government debt management framework to reduce debt exposure risks and support balanced and stable fiscal planning, by developing comprehensive public sector and contingent liability frameworks, and implementing a sovereign green financing framework, it said.
While the economy has been robust, it said the development of the non-hydrocarbon economy has remained slow with growth averaging less than 2% during 2017-22, impacted by the effects of the Covid-19 pandemic and geopolitical tensions regionally and internationally.