Qatar’s continued commitment to sustainable economic development is well reflected on the State Budget for 2016, which lays emphasis on infrastructure upgrade and health and education sectors.
The budget, which was recently endorsed by HH the Emir Sheikh Tamim bin Hamad al-Thani through Law No. 26 of 2015, has set apart a whopping QR90.8bn for major projects, which is QR3.3bn higher than the previous fiscal year.
A significant outlay (QR90.9bn) has been made for the infrastructure, health and education sectors, which represents 45.4% of the total expenditure in the 2016 budget.
The allocation to the infrastructure sector totalled QR50.6bn in the 2016 budget, while education sector will have QR20.4bn and health QR20.9bn. Numerous projects have been announced in the country’s education and health sectors, which is a step forward in the country’s goal of achieving sustainable development in realising the Qatar National Vision 2030.
HE the Minister of Finance Ali Sherif al-Emadi said the State Budget for 2016 demonstrated the government’s “keenness on sustainable development”.
By providing a significant outlay for major projects, the minister said Qatar underscores its commitment to the “implementation of development projects” based on the “planned schedule”.
The budget for the next fiscal year projects a revenue of QR156bn and an expenditure of QR202.5bn. The figures, however, show that Qatar might post a deficit of QR46.5bn in 2016, which al-Emadi said would be financed through “debt instruments” in the local and international markets.
The decline in projected revenues is due to a reduction in the oil price assumption to $48 a barrel compared with $65 in the previous fiscal year.
In early December, benchmark Brent crude briefly dipped below $40 a barrel for the first time since February 2009, from $115 a barrel in August 2014.
Qatar emphasised that the “main goal” during the preparation of the 2016 budget was to “ensure the completion and implementation” of major projects in key sectors along with projects related to the FIFA World Cup in 2022. The finance minister asserted that this policy would help Qatar maintain robust economic growth.
Meanwhile, Qatar’s economy is expected to grow 3.7% this year but a pick-up in hydrocarbons is slated to expand the real growth higher at 4.3% in 2016, then easing to 3.9% in 2017, according to the Ministry of Development Planning and Statistics (MDPS).
Although a modest fiscal deficit of 4.8% of gross domestic product (GDP) is expected in 2016 against a surplus of 1.7% this year, an expected oil price recovery and continued spending restraint could see the deficit fall to 3.7% in 2017.
Qatar’s determination not to source funds either from the country’s reserves at Qatar Central Bank or the investments made by the country’s sovereign wealth fund- QIA is based on sound economics.
“Qatar has accumulated strong financial reserves at QCB and made significant investments through QIA during the period of high oil and gas revenues. Qatar will maintain and reinvest these reserves and investments to further enhance the country’s financial position,” al-Emadi clarified.
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