Qatar has to move to a revenue generating economy from a spending state as it has already developed a robust fiscal policy framework, according to His Excellency the Finance Minister Ali bin Ahmed al-Kuwari.
“We need to move from a spending economy to revenue generating economy,” the minister told students, faculty and guests at the Carnegie Mellon University Qatar’s Dean’s Lecture series.
The minister gave an overview of the role of his ministry in maintaining fiscal sustainability in the country.
Highlighting that Qatar has adopted a hybrid model of using hydrocarbons revenues and fiscal instruments as taxes; he said the fiscal policy is really to have a longer view on the revenues and expenditure of the country.
In this regard, HE al-Kuwari cited the example of Norway, which took a decision many years back that oil revenues would be channelled to sovereign welfare and doesn’t go to budget.
“We are using the oil and gas revenue to build future sustainability, which will come from two sources, fiscal measures and the Qatar Investment Authority (QIA); so it’s very important to have a very strong QIA that has sufficient revenue to support the country, but we’re not saying QIA is going to spend in the fiscal. We are going to be ready to spend in the fiscal, but not to be there, the idea of the fiscal should be a standalone, and revenue should be coming from resources of the country, from taxation, customs, to have a very strong economy,” he said.
On the general budget, he said the biggest chunk of revenues comes from oil and gas but the ministry tends to forecast a very conservative price for oil.
In this regard, he said although analysts expected oil prices to remain range-bound around $65 a barrel, the ministry’s estimate was $55 to ensure fiscal sustainability and enhance resilience against market fluctuations.
Highlighting that the International Monetary Fund (IMF) expects average annual growth of 4% for 2025; he said Qatar’s growth could peak this year at around 6% and then slowdown. “So this expansion is going to drive economy and businesses in the country,” he added.
