By Pratap John/Chief Business Reporter

In what is seen as Qatar’s determination to accelerate its planned infrastructure building programme, the country’s budget for 2013/14 envisages a government spending of QR210.6bn, up 18% on the previous year.

HE the Minister for Finance and Economy Yousef Hussein Kamal was quoted by the official Qatar News Agency (QNA) as saying the budget, with a proposed revenue of QR218.1bn, would be based on a conservative oil price of $65 a barrel.

Qatar’s infrastructure building plans envisage spending of about $140bn through 2022 on a rail system, a new airport (Hamad International including its further expansion) and a seaport and hundreds of kilometres of new roads in addition to stadiums for the FIFA World Cup 2022 which Qatar is hosting.

Some of the infrastructure upgrade projects are expected to break ground by the second half of this year.

Standard Chartered had said in a recent report that sport-related infrastructure was more likely to begin midway through Qatar’s decade-long spending cycle.

“In this quarter so far, we have seen positive signs related to Qatar’s spending commitments for FIFA 2022. In addition, so far this year the government has awarded a number of projects related to the country’s decade-long infrastructure commitments,” StanChart had said.

According to QNA, the budget planned a surplus of QR7.4bn, down from a surplus of QR27.7bn pencilled in the previous fiscal year.

“The surplus decrease is understandable. When external accounts are that healthy, there is a natural tendency to increase spending, and in doing so, you dig into your surplus.  But that’s okay - QR7bn is still quite healthy,” Masraf Al Rayan senior economist Farah Ahmed Hersi told Reuters.

“The budget shows how serious the country is about speeding up infrastructure development to get ready for 2022,” Hersi said.

HSBC chief economist (GCC) Simon Williams told Reuters budgeting in Qatar should be taken as a statement of intent rather than a detailed financial plan.

“This budget makes clear that Qatar not only intends to drive spending upward, it has the means to do so.” 

On the anticipated reduction in surplus, Williams said he was not concerned by the anticipated surplus decrease. “The real challenge for them is to execute what’s planned.”

Kamal said in a statement to QNA that the new budget was based on a number of considerations.

The first of which is that there are indications that the world economy is on its way to improvement, despite the fact that these expectations are marred with uncertainty.

Qatar’s economic growth, Kamal said, was expected to be more than 4% this year, driven by the non-hydrocarbon sector, especially services and construction.

Qatar, StanChart had said in its recent report, was moving towards a phase of non-hydrocarbon driven growth. The key driver of the national economy will be the non-hydrocarbon sector.

Qatar’s state budget leaped into a large surplus of QR94.6bn in the July-September period, the second quarter of its 2012/13 fiscal year, equivalent to 53.9% of gross domestic product in that period, preliminary central bank data show. 

Analysts polled by Reuters in January forecast Qatar’s budget surplus would be 9.1% of GDP for the whole 2012/13 fiscal year, narrowing to 7.5% in 2013/14.

 

Decree endorses budget

 HH the Emir Sheikh Hamad bin Khalifa al-Thani yesterday issued the Emiri Decree No 9 of the year 2013, endorsing the state’s general budget for the fiscal year 2013-2014.  “The decree is applicable as of April 1 this year,” the official Qatar News Agency (QNA) said.