Posted on April 01, 2011

Qatar will boost budget spending by 19% to QR139.9bn in the fiscal 2011-2012 with a significantly higher outlay for major infrastructure projects and the education and health sectors. HH the Deputy Emir Sheikh Tamim bin Hamad al-Thani yesterday endorsed Qatar’s largest ever general budget , covering the period between April 2011 and March, 2012.

Revenue is set to soar by 27% to QR162.5bn with the budgeted oil price at $55 a barrel, unchanged from the previous year. This would put the budget surplus at 6.3% of gross domestic product (GDP) according to Reuters calculations, above 2.7% planned for 2010/11. According to the official Qatar News Agency (QNA), Qatar expects to book a budget surplus of QR22.3bn in this financial year.

The budget released by HE the Minister of Finance and Economy, Yousef Hussein Kamal, indicates that strong emphasis has been laid on education and health sectors besides infrastructure upgrades under the directives of HH the Emir, Sheikh Hamad bin Khalifa al-Thani. Kamal said the policies laid out by Qatar’s wise leadership helped the country achieve “comprehensive and sustainable development”. Besides its landmark achievement in the LNG industry, the country’s banking industry also performed well thanks to “strong backing” from the government, he said.

The education sector would receive an allocation of QR19.3bn in 2011-12, up QR2.1bn or 12% compared with the previous financial year.  Qatar’s health sector is given an outlay of QR8.8bn in the budget for 2011-12, which shows an increase of QR301mn or 3.6% more than the previous financial year. Another priority for the government is provision of housing for Qataris, for which the budget boosted outlay by 100% to QR5.2bn in 2011-12.

A lion’s share of the budget (41%) is set aside for financing public projects including the New Sea Port, railways, completion of New Doha International Airport and sewage.

The International Monetary Fund (IMF) in its last report said Qatar is set for the ‘strongest performance’ this year compared with other GCC countries.

Qatar’s Gross Domestic Product (GDP) achieved a growth of 16.3% in 2010, and it is expected that a growth rate of 20% will be achieved in 2011.

Qatar’s installed production capacity of LNG reached 77mn tonnes per year (tpy) late last year, a feat the country achieved in a relatively small period of 14 years.  The country’s LNG production stood at 30mn tpy in 2008.  Qatar, the world’s largest exporter and trans-shipper of LNG, supplies gas to customers in some 23 countries in four continents.
The 77mn tpy capacity is met by 14 trains, seven each at Qatargas and RasGas. Six of these are “mega trains”, each with a 7.8mn tpy annual capacity. Currently, Qatar accounts for 28% of the global LNG output.

Qatar now has the highest sovereign rating in the region. Qatar’s political and economic stability is also a key factor in its success in attracting foreign investments. “The fact that this year’s budget is bigger will affect the economy’s performance significantly. Qatar could even afford to run a deficit budget as it has been accumulating surpluses for a number of years now,” said Marios Maratheftis, Standard Chartered’s head of research for Middle East, North Africa and Pakistan.

“Strong hydrocarbon prices mean that it could decide to increase spending during the year, if it chooses to. They don’t face the constraints that other countries such as the UAE or UK have,” Maratheftis told Reuters.

Economy seen surging:
Qatar’s economy is expected to surge 19% this year on the back of country’s rising gas production and public spending, the Saudi American Bank Group (Samba) said in its economic bulletin. Qatar, the best performing economy in the region and among the robust ones in the world, had seen its economy galloping 16% in 2010. Growth in 2010 was far above the 8.7% rate recorded in 2009, when oil prices plunged by nearly $30 a barrel over the previous year, Samba said.

In nominal terms, Qatar’s GDP leaped by 24.5% in 2010 and is projected to swell by 22.4% this year because of higher oil prices and LNG output, Samba said.

source: Gulf Times