Qatar's upcoming budget to see surplus on higher oil prices: Al-Emadi
October 08 2018 09:49 PM
HE al-Emadi: Government to continue with capital spending.
HE al-Emadi: Government to continue with capital spending.

Qatar’s upcoming general budget is all slated to see surplus and the government will continue with capital spending, even as projects relating to 2022 are nearing completion, according to HE the Finance Minister Ali Sherif al-Emadi.

Addressing the International Products and Exhibition Conference (IPEC), he said the budget surplus expectations come amidst conservative assumed price for oil.

He said Qatar achieved a financial surplus during the first nine months of this year for the first time in two years.

The previous year's general budget, which follows the January-December format, had set the price of oil at $45 a barrel; even as the prices now exceed $80.

"We are giving final touches," he said, adding the continued focus of the budget on capital expenditure, especially in the health, education and infrastructure projects, will see an increase, and revenues will see also recovery in 2019.

Qatar’s external and fiscal balances are expected to show marked improvement this year despite the ongoing regional tension and growing emerging market stress, the US-based economic think-tank Institute of International Finance (IIF) had recently said; forecasting the surplus to be 3.5% of gross domestic product (GDP) this year and 3.7% in 2019 compared with fiscal deficit of 2.7% in 2017.

Growth in Qatar is largely driven by the private sector, whose growth was more than 4%, exceeding the official expectations, al-Emadi said, adding it is expected to continue.

The IIF forecasts show that Qatar's growth is likely to rise from 1.6% in 2017 to around 2.3% in 2018, primarily on the back of the non-hydrocarbon sector (driven by construction), but aided by stable hydrocarbon production after several years of contraction. Qatar Petroleum, the country’s hydrocarbon bellwether, recently announced the plan to increase LNG output to 110mn tonnes per annum from the present 77mn tonnes.

Qatar's growth performance remains resilient and the direct economic and financial impact of the Gulf crisis has been "manageable", the International Monetary Fund (IMF) had said in its recent Article IV consultation with Qatar.

The IMF directors had noted that strengthened expenditure control, with emphasis on further public?service reform and accelerated reform of the public utility companies, would help Qatar improve economic efficiency.

Al-Emadi, the former chief executive of the country's largest lender QNB, said Qatar is working on the development of legislation to stimulate investment, and has signed trade exchange agreements with more than 100 countries, and other agreements to prevent double taxation with more than 70 countries.

Qatar recently allowed up to 100% foreign investment in almost all the economic sectors, excepting banking and insurance, where Prime Minister's approval are required.

The minister highlighted that Doha occupies advanced positions in many international classifications that reflect the advantages of the investment climate in Qatar such as the competitiveness index, freedom of business and ease of entry into the country.

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