State budget surplus 19.4 bln riyals, 17.5 pct of GDP; spending at 48 pct of 2010/11 plan, revenue jumps
Qatar's state budget swung into a surplus of 17.5 percent of annual economic output in July-September last year as government revenue doubled from a year earlier, data showed on Tuesday.
The surplus reached 19.4 billion riyals ($5.3 billion) in the second quarter of Qatar's 2010/11 fiscal year as revenue was partly boosted by higher gas output, the central bank's preliminary estimates showed.
Qatar, one of the world's top investors through its sovereign wealth fund, ran a deficit of 23.2 percent of gross domestic product in April-June, which analysts said was due to common budgetary adjustments.
The world's largest liquefied natural gas exporter boosted spending by 25 percent in the current fiscal year, helped by robust oil prices and gas output expansion. It is set to spend even more in the run-up to hosting the 2022 soccer World Cup.
The fiscal year in Qatar starts in April. The Gulf Arab state publishes its public finance data with long delays and large revisions in budget data are common in the Gulf.
Revenue stood at 48.4 billion riyals in July-September 2010, while expenditure totalled 29.0 billion, or 48 percent of the full-year plan, slightly up from a year earlier.
"They will do another year of overspending due to capacity increases towards the end of the fiscal year," said John Sfakianakis, chief economist at Banque Saudi Fransi. "It is very common for Qatar."
Qatar has overspent its budget plan in the previous two fiscal years. Its income also largely overshot the initial plan due to conservative oil price estimates.
In its 2010/11 budget, the cash-rich OPEC member pencilled in spending worth 117.9 billion riyals and a surplus of 9.7 billion, or 2.7 percent of GDP. Analysts polled by Reuters expected a surplus of 11.3 percent of GDP.
Expansion of gas output helped Qatar ride through the global downturn, bringing the budget surplus to 46.6 billion riyals, or 13 percent of GDP, for 2009/10, its highest level in five years.
Qatar, whose hydrocarbon-based economy is forecast to expand at a double-digit clip this year, assumed an oil price of $55 a barrel in its 2010/11 budget. Benchmark U.S. crude prices have been hovering between $64 and $93 a barrel since the start of the current fiscal year.
Qatar plans to spend some $100 billion over the next five years on infrastructure projects including road and rail networks, planned before it was chosen to host the World Cup, as well as air-conditioned stadiums.
"It (spending in the new budget) is going to be big," said a Doha-based economist. "The country will start to prepare itself this year for the big event in 2022, and a chunk of the mass transit portion of that will be spent this year."
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