The deficit of QR 46.5bn ($12.8bn) envisaged inQatar’s 2016 budget reflects the impact of lower oil prices but remains in line with most expectations, analysts say.
It will amount to about 5 per cent of Qatar’s forecast GDP in 2016. This compares with a forecast in the IMF’s article IV consultation report on the Qatar economy published in April which forecast a 4 per cent deficit for the year.
The budget is Qatar’s first in almost two years, following a shift of its fiscal year to 31 December from 31 March to align with private sector practice.
Qatar has budgeted for revenues of QR 156bn and expenditures of QR 202.5bn in 2016. This compares with QR 226bn and QR 218.4bn respectively in the previous budget.
The shortfall is expected to be covered by local international debt issues, according to the budget statement carried by the state news agency QNA.
Finance minister Ali Sherif al-Emadi told QNA the budget would sustain spending in key sectors including health, education, infrastructure and transport, with special focus on railways and other projects tied to Qatar’s hosting of the 2022 World Cup.
Health, education and infrastructure accounted for the largest share of the 2016 budget, at 91.9 billion riyals, or 45.4 percent of the total.
Major infrastructure expenditures, which totalled 50.6 billion riyals alone, would include railways, the new Doha port, several large roadways and the expansion of electricity, water and sewage networks.
Oi prices fell on 21 December to their lowest prices since 2004.