Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Qatar's Fiscal Deficit Set To Decline In 2017

By Qatar National BankMarket OverviewJan 01, 2017 11:59PM ET
www.investing.com/analysis/qatar-39;s-fiscal-deficit-set-to-decline-in-2017-200171199
Qatar's Fiscal Deficit Set To Decline In 2017
By Qatar National Bank   |  Jan 01, 2017 11:59PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

On December 15, Qatar’s Ministry of Finance (MoF) released its budget for 2017 in which it outlined its fiscal outlook for the coming year. The budget committed to reducing Qatar’s planned deficit by 38.9% from QAR46.5bn in 2016 to QAR28.4bn in 2017. The deficit is expected to decline due to a pickup in government revenues and continued rationalisation of current expenditure. However, capital spending is expected to increase in 2017 to support Qatar’s preparation for the World Cup and economic diversification objectives. The government has also outlined in the budget an intent to further accelerate investment and infrastructure spending in the coming years.

Qatar budget fiscal outlook
(bn QAR)

Qatar Budget Fiscal Outlook
Qatar Budget Fiscal Outlook

Sources: Qatar Ministry of Finance and QNB Economics

The authorities announced that revenues are expected to increase by 9.0% in 2017 compared to last year’s budget. The revenue projection is based on an oil price assumption of USD45 per barrel. On the expenditure side, the budget predicts a slight decline of 2.0%relative to the 2016 budget but the composition of spending is expected to change. Current expenditure, which includes salaries and wages, will decline by 6.6% in 2017 as the government continues to increase the efficiency of public spending and benefits from cost savings from the consolidation of ministries in previous years.

Current expenditure’s share is expected to fall from 53.3% of total spending in 2016 to 50.8% in 2017. In contrast, capital spending is planned to increase by 3.2% with its share of total spending rising from 46.7% in 2016 to 49.1% in 2017. Capital project spending will be targeted at transportation and infrastructure (21.2% of total spending), health (12.3%) and education (10.4%).

The MoF also signalled an intention to boost future capital spending, announcing that the government will agree to QAR46.1bn worth of new contracts in 2017, adding to a stock of QAR374bn non-hydrocarbon sector projects already initiated by the public sector. Moreover, these agreements will be also be focused on infrastructure and transportation and World Cup related projects.

Budget expenditure allocation

(bn QAR; unless otherwise noted)

Budget Expenditure Allocation
Budget Expenditure Allocation

Sources: Qatar Ministry of Finance and QNB Economics

The government also announced it will continue to finance the deficit through domestic and external debt instruments and not draw down on accumulated reserves. In 2016, Qatar secured a USD5.5bn syndicated loan and successfully issued USD9.0bn of bonds. Its reserve position remains strong, with accumulated current account surpluses of USD323bn at the end of 2015, which accounted for 193.6% of GDP.

In conclusion, Qatar’s budget outlines a clear intent to reduce the government deficit while also supporting growth through higher capital spending. The commitment to ramp up future capital spending indicates that public investment will continue to be the main driver of economic growth in the coming years. But the investment programme will also support the drivers of Qatar’s long-term growth, evidenced by the sizeable investments in the education and health sectors. These investments will foster human capital accumulation, population growth and private sector development in line with Qatar’s National Vision 2030.

Qatar's Fiscal Deficit Set To Decline In 2017
 

Related Articles

Boris Schlossberg
The Hundred Year Portfolio? By Boris Schlossberg - May 07, 2021

Diversifying by market regime rather than asset class The “Moneyball of Money” approach Challenges for the DIY investor In part one of our analysis of Chris Cole’s appearance on...

Jeffrey Halley
Non-Farms Is A Crowded Trade By Jeffrey Halley - May 07, 2021 1

Friday is finally here, and with it the week’s data highlight, the US Nonfarm Payrolls. It has been a choppy week of trading across most asset classes. As the dust settles,...

Qatar's Fiscal Deficit Set To Decline In 2017

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email