Qatar’s government will need a total of QR 159bn ($43.7bn) in 2017-21 to deal with budget deficits forecast for the period, the IMF’s 2017 Article IV report on the country says.
The fund forecasts total Qatar government debt will rise by 64 per cent in the period to QR 446.3bn ($123bn) in 2021 from QR 272bn ($75bn) in 2016.
Qatar recorded a budget deficit of QR52bn ($14bn) in 2016. This was the first since the 1999/2000 financial year.
The deficits projected to 2021 reflect a combination of lower oil prices, declining oil production and rising government spending in 2017-21. Government spending was cut in 2016 for the first time since 1998/99.
The IMF report says that Qatar has the capacity to meet unprecedented financing requirements because of its strong financial position.
“In view of Qatar’s large buffers, there is space to pursue fiscal consolidation at a gradual pace,” it says. “Ongoing consolidation efforts through cutting recurrent expenditure and mobilizing non-hydrocarbon revenues are appropriate. Additional revenue measures, including broadening the coverage of corporate income tax and further reforming energy subsidies, should be considered.”
The report says that the Brent crude oil price is forecast to average $56.3 a barrel in 2016 compared with $44 in 2016. It is forecast to rise to $57.5 a barrel in 2021.
Other features of the report are forecasts that Qatar’s GDP at current prices will grow by 10.7 per cent in 2017 and that the current account will record a surplus of $1.2bn compared with a deficit of $3.5bn last year, the first since 1998.