Qatar Government Spending Growth Slows Sharply In 2012/13

Qatar’s government spending rose 2.2 per cent to a record QAR178.2 billion ($48.9 billion) in its last fiscal year, slowing sharply from double-digit increases seen in the previous decade, official data showed.

It was the first time that the government’s annual spending undershot its budget plan since 1990 – a sign of the difficulties which Qatar is having in pushing forward huge and complex infrastructure projects.

Some big projects, such as a new airport, have been delayed by difficulties in planning, coordination and arranging the necessary resources for them, as well as by bureaucratic obstacles. So the government has so far ended up spending less than it aimed to spend.

Total state spending came in slightly below the initial plan of QAR178.6 billion for the fiscal year that ended in March, finance ministry data released by the central bank showed.

Development expenditure was QAR49.3 billion, well below the QAR62.1 billion which the government had originally earmarked for the year.

The 2.2 per cent rise in total spending last fiscal year compared to an average annual growth rate of 24 per cent in 2002-2012. The wealthy gas exporter overspent its state budget by 23 per cent on average during that period.

Qatar spent a record QAR34.1 billion on public sector wages in 2012/13, nearly 15 per cent more than in the previous year, the data showed.

But revenue jumped 24.7 per cent to a record QAR277.4 billion. Receipts from oil and gas sales accounted for roughly 62 per cent of state income in 2012/13, down from 70 per cent in the previous year because of a rise in investment returns and other revenue. Qatar is one of the world’s most active sovereign investors in global markets.

The government’s budget surplus therefore more than doubled to a record QAR99.2 billion last fiscal year, or 14.2 per cent of gross domestic product.

The government plans to raise spending to QAR210.6 billion in the current fiscal year as it steps up the infrastructure building programme.