Posted on March 25, 2011

Qatar will boost its government budget for the new fiscal year 2011-12 but has no immediate plans to issue sovereign bonds, the Gulf Arab state's finance minister said on Wednesday.

The world's top liquefied natural gas exporter, which has escaped unrest sweeping through the Arab world so far, had raised spending by 25 percent in the current fiscal year, helped by robust oil prices and gas output expansion.

"Next week, we will announce the budget. It is bigger than last year's," Youssef Kamal told reporters on the sidelines of a meeting of Gulf policymakers in Doha.

Kamal echoed his recent comments that the budget would be based on oil prices of not more than $60 per barrel but declined to give further details.

Earlier in March, he said the budget for the new fiscal year, which starts in April, would likely be based on an oil price of between $55 and $60 per barrel.

Worried by the spreading unrest, autocratic governments across the Gulf offered handouts worth billions of dollars to calm social tensions at home.

In its 2010-11 budget, the cash-rich OPEC member pencilled in spending worth QR117.9bn ($32.4bn) and a surplus of QR9.7bn, or 2.7 percent of gross domestic product.

Minister of Economy & Finance, Mr. Yousef Hussain Kamal

"We will have some surplus in the [current] budget," Kamal said without further details.

Analysts polled by Reuters in March expected a surplus of 11.5 percent of GDP in the current fiscal year and 12.1 percent in 2011-12.

Qatar, one of the world's top investors through its sovereign wealth fund, plans to raise spending on infrastructure in the run-up to hosting the 2022 soccer World Cup.

The country issued a QR50bn bond to local banks in January, which sources said was to raise funds for development projects and to drain excess money from the banking system.

Political unrest in the region, which also spread to nearby Bahrain, Oman and Yemen, has fuelled a surge in oil prices well above $100 per barrel.

The tiny Gulf Arab state, one of the world's fastest growing economies, will see GDP expanding by 18 percent or more this year, Kamal also said, reiterating recent remarks.

Social tensions sweeping through the region are not expected to impact growth prospects in the Gulf state, he said.

"We are a stable country with a AA rating. We have good growth, may be above expectations," Kamal said.

Qatar, whose hydrocarbon-based economy is forecast to expand at a double-digit clip this year, assumed an oil price of $55 per barrel in its 2010-11 budget.

source: Reuters