Qatar records highest fiscal surplus in 2009-2010

Qatar basked in the highest budget surplus in its fiscal 2009-2010 year because of a surge in non-oil revenue although the world’s top gas exporter had projected a deficit, according to a Kuwaiti-based bank.

Despite an increase in spending, the fiscal surplus leaped to an all-time high of around QR46.3 billion in 2009-2010 fiscal year, which ended on March 31, Global Investment House (GIH) said in a 40-page study on Qatar.

The study projected the Gulf country’s real GDP to sharply rebound by around 16 per cent this year after slowing down to about 8.6 per cent in 2009 from a record real growth of 25.4 per cent in 2008.

“Qatar is expected to post a surplus during the fiscal year 2009-2010 with preliminary budget reaching QR46.6 billion, an 11.7 per cent increase from the previous year, “GIH said.

“This is largely attributed to the diversified economy as non-oil revenues are expected to increase by 39.8 per cent to nearly QR85.2 billion…total government revenues are projected to rise by 9.7 per cent to reach QR154.6 billion.”

Qatar had projected a deficit of QR5.8 billion in its 2009-2010 budget despite a slight fall in planned spending for the year. The deficit was assumed on the basis of a sharp fall in revenue from around QR103.3 billion in 2008-2009 to QR88.7 billion in 2009-2010 mainly because of a steep drop in crude prices.

The report showed actual revenue shot up to their highest level of around QR165.6 billion in 2009-2010 due to a large increase in non-oil earnings.

Expenditure also climbed to a record high of QR108 billion from around QR99.2 billion in the previous fiscal year, according to GIH.

“Qatar has been able to post consecutive fiscal surpluses for the past five years due to the continuous expansion of the oil and gas sector, and diversification efforts…the surplus has grown by around 32.9 per cent annually during that period…the 200-2010 surplus is expected to climb to about 13.3 per cent of GDP compared to 10.3 per cent in the previous fiscal year,” the report said.

Turning to the economy, GIH projected Qatar’s GDP to leap by around 16 per cent in real terms and 10.8 per cent in current prices to nearly QR396.4 billion this year from around QR357.8 billion in 2009. The report showed Qatar’s nominal GDP plunged by around 11.2 per cent in 2009 because of lower oil prices after recording one of its highest growth rates of 37.1 per cent in 2008.

The report also expected the country’s GDP per capita income to climb to an all time high of around $82,357 to maintain its position as one of the wealthiest nations thanks to its fast growing LNG exports.

Estimates by the nation’s largest bank, Qatar National Bank (QNB), showed the surge in Qatar’s LNG production nearly tripled its gas income in three years, rising from around QR19.8 billion (Dh20 billion) in 2004 to about QR58.8 billion (Dh59.5 billion) in 2008. The earnings were projected to sharply rise last year after LNG supplies exceeded 44 million tonnes.

Official data showed LNG contribution to Qatar’s GDP overtook the oil sector for the first time last year following a surge in gas production as well as a sharp fall in oil prices and the country’s crude output.

Qatar launched mega LNG projects in early 1990s to tap its giant offshore North Field, the world’s largest reservoir of non-associated gas, formally estimated at more than 900 trillion cubic feet at the end of 2009.

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