A surge in LNG exports allied with higher oil prices to allow Qatar to record a high fiscal surplus of around 8.7 per cent of GDP while its economy raced by nearly 16 per cent last year, according to an official report.
“Qatar’s budget is expected to record a surplus of around 8.7 per cent in the current fiscal year but it will remain lower than the surplus recorded in the previous fiscal year…this is because of high spending as part of the country’s counter-crisis fiscal expansion measures,” said the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League establishment.
Qatar assumed a surplus of QR9.7 billion in its current fiscal year, which started on April 1. Expenditures were estimated at QR117.9 billion and revenue, mostly from the sale of oil and liquefied natural gas, at 127.5 billion.
Qatar basked in the highest budget surplus during 2009-2010 because of a surge in revenue although the world’s top LNG exporter had projected a deficit.
Despite an increase in spending, the fiscal surplus leaped to an all time high of around QR46.3 billion in the 2009-2010 fiscal year, which ended on March 31.
Qatar had forecast 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.
But actual revenue shot up to their highest level of 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.
“The surplus in the 2010-2011 budget was lower than that in the previous year relative to GDP as that one stood at around 9.4 per cent,” the AMF said.
Citing Qatari government estimates, the report showed the country’s budget recorded a surplus of nearly QR19.4 billion in the third quarter of 2010, with total revenue standing at QR48.4 billion and spending at QR29 billion.
The AMF gave no figures on the value of the budget surplus this year but Qatar’s GDP is projected at around $110-115 billion in real terms. This means the surplus could be around $11.5-12 billion (QR41.9-43.8 billion).
Turning to the economy, the AFM said Qatar’s GDP, one of the fastest growing economies in the world, grew by around 16 per cent in real terms in 2010.
“This estimate is higher than previous projections thanks to the sharp rise in infrastructure projects and LNG exports…it is also far higher than growth of around 8.6 per cent recorded in 2009,” it said.
Experts believe Qatar’s economy would maintain its high growth rates in the next few years while its budget will remain in surplus following the completion of mammoth gas projects that turned the small OPEC nation into the world’s largest LNG supplier after overtaking Indonesia.
Qatar said before the end of 2010 that it had completed mega projects to pump nearly 77 million tonnes of LNG per year and most of them would be exported to at least 20 countries across Asia, Europe and the Americas.
The country launched LNG ventures in early 1990s to tap the massive gas wealth of the 6,000-square-km offshore North Field, estimated at around 25 trillion cubic metres, nearly 15 per cent of the world’s total gas deposits.
Besides lifting its economy, the expansion in LNG sales allied with exports of crude oil and related products to turn Qatar into one of the richest nations in terms of GDP per capita, which exceeded $70,000 in 2010.
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