Browsing 'budget' News

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Photo for illustrative purposes only.

Qatar’s government is spending some $500 million a week on capital projects around the country, its Minister of Finance has said.

That pace of spending could continue for the next three to four years as the nation prepares for the 2022 World Cup, Ali Sherif Al Emadi said, according to AFP.

“That doesn’t mean the stadiums only, we are talking about highways, rail, ports, airports, those are really underway, even hospitals and everything,” the minister said to reporters who were on a press trip to Doha.

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Minister of Finance Ali Sharif Al Emadi

He added:

“We are really giving ourselves a good chance of delivering things on time and we don’t want to get in a place that we start painting while people are coming to the country.”

Austerity measures

Despite the huge expenditures, Al Emadi confirmed that austerity measures around Qatar will continue.

Last year, lower oil prices caused the country to run its first budget deficit in more than a decade.

This year’s budget slightly cuts spending and projects a smaller deficit of $7.8 billion, compared to $12.8 billion in 2016.

Reem Saad / Doha News

Photo for illustrative purposes only.

In response to fiscal pressures, the government has consolidated its ministries, partially lifted petrol subsidies and postponed some construction projects.

There is also a plan to introduce a value-added tax next year, though Al Emadi said yesterday that this might be postponed until 2019, AP reports.

Qatar’s Emir has also denounced extravagance and urged citizens to spend more “reasonably.”

Additionally, thousands of people have been laid off in the oil and gas industry and by other companies in the past two years.

That said, hiring is picking up at least in the healthcare industry as several hospitals near completion.

Thoughts?

Omar Chatriwala / Doha News

Emiri Diwan

Qatar’s Emir has approved a new budget that slightly cuts spending as it prepares to deal with a forecasted QR28.3 billion ($7.8bn) deficit next year.

According to the Ministry of Finance, the government plans to spend QR198.4 billion in 2017 and generate some QR170.1 billion in revenue.

This will be the second year in a row the country has projected a shortfall. The current deficit is the first Qatar has seen in 15 years.

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Photo for illustrative purposes only.

But the upcoming forecast is much smaller than the QR46.5 billion estimate we saw for this year.

This suggests that while low oil prices continue to affect the country’s finances, authorities do expect relief on the horizon.

Qatar’s fiscal year runs from January to December.

Boosting revenues

In a statement, Qatar’s Finance Minister Ali Sherif Al Emadi said that total revenue for the upcoming year is expected to be 9 percent higher than it was this year.

This suggests that projected revenues for 2016 were overstated.

Compared to the forecasted QR156 billion figure announced last December, 2017’s projected revenues should have reflected a 27 percent jump.

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Minister of Finance Ali Sharif Al Emadi

However, expected revenues may be understated for 2017. This is because the budget is based on the conservative assumption that oil prices will be around $45 per barrel.

But Brent crude is currently trading at around $54 a barrel and expected to go up after OPEC and oil-exporting countries recently agreed to slash output.

Once again, Qatar expects to cover any shortfall by borrowing money rather than tapping into the massive savings held by the Qatar Investment Authority.

Big projects ahead

According to Al Emadi, the big focus for this year’s budget is ensuring major projects – including those related to the 2022 World Cup – go ahead as scheduled.

Some QR93.2 billion, or 47 percent of the budget, is earmarked for these works.

“This demonstrates our commitment to complete all projects in the main sectors on schedule. An increase in construction activities on various projects will lead to higher allocations for major projects during the coming three fiscal years,” Al Emadi added.

Meanwhile, the government plans to spend some QR24.5 billion on the health sector (12.3 percent of expenditure). This is up 17 percent from the QR20.9 billion set aside in 2016.

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Sidra Hospital

The money will go toward completing the much delayed Sidra Medical and Research Center, expanding Hamad Medical Corp. services and completing a planned laborers’ hospital in the Industrial Area.

Education will account for another QR20.6 billion (10.4 percent of expenditure), which is about on par with 2016’s spending.

The main focus here will be constructing 17 new schools and nurseries and finishing off another 28 such buildings.

Plans are also afoot to fund new projects at Qatar University and Qatar Foundation.

Thoughts?

Cabinet officials have approved Qatar’s budget for the upcoming fiscal year and referred it to the Advisory Council for consideration, QNA reports.

No figures have been publicly disclosed, but officials said the focus in 2017 will be on improving efficiency in public spending; increasing revenue from non-oil and gas sources; and maintaining a high credit rating.