Qatar’s state budget surplus narrowed to 2.9 per cent of quarterly economic output in the third quarter of its 2011/12 fiscal year, as revenue dropped compared with the previous three months while spending took off, data showed on Thursday.
The world’s top exporter of liquefied natural gas booked a surplus of QAR5.1 billion ($1.4 billion) in October-December 2011, down from a hefty surplus of QAR42.2 billion, or 25.6 per cent of gross domestic product, in the previous quarter, preliminary estimates published by the central bank showed.
On a cumulative basis, the budget surplus reached QAR45.1 billion in the first three quarters, or 7.1 per cent of 2011 GDP, a Reuters calculation based on official data showed.
The government had targeted a surplus of QAR22.5 billion in the fiscal year, which ended in March.
Revenue dropped almost 10 per cent to QAR55.8 billion in October-December from a year earlier, bringing cumulative income for the first three fiscal quarters to 102 per cent of the 2011/12 target. It fell 28 per cent compared with July-September.
Government expenditures jumped 62 per cent in the period from a year ago to QAR50.7 billion and met 87 per cent of the full-year target on a cumulative basis, the data showed. Spending surged by 42 per cent from the previous quarter.
Qatar’s economy is expected to slow this year from 14 per cent in 2011 as the impact of two decades of gas output expansion fades. But the government plans to boost spending by 27 per cent in the new 2012/13 fiscal year is likely to help keeping it in high single digits.
In its 2011/12 budget, the country pencilled in spending worth QAR139.9 billion. But that was before Qatar, which has avoided social turmoil in the Middle East, hiked basic salaries and social benefits for state employees by 60 per cent in September, while military staff got 50-120 per cent rises.
The measures were expected to add an estimated $1.6 billion to government expenditure in 2011/12, the International Monetary Fund said in January following annual consultations.
Qatar, which plans to boost infrastructure spending ahead of hosting the 2022 soccer World Cup, assumed an oil price of $55 per barrel in its 2011/12 budget.
It has largely overspent its budget plan in the previous three fiscal years. Its income has also overshot targets due to conservative oil price estimates.
The government outlined public investment worth QAR347 billion during the five years to 2016 in its development strategy, with more than $65 billion of that expected to be on infrastructure.