Qatar Spending Jumps 33% In First Half Of 2013/14 Fiscal Year

Qatar’s government spending rose nearly 33 per cent to 93.2 billion riyals ($25.6 billion) in the first half of this fiscal year, speeding up after a slow start to soccer World Cup 2022 projects, data showed on Thursday.

Expenditure in April-September accounts for a little over 44 per cent of the record 210.6 billion riyals Qatar plans to spend in the 2013/14 fiscal year.

The rate of increase compared with the same period a year ago is the fastest since at least 2008, preliminary finance ministry data released by the central bank showed.

The world’s top liquefied natural gas (LNG) exporter spent 70.3 billion riyals in the same period of the previous 2012/13 fiscal year. Qatar’s fiscal year ends in March.

Certain big-ticket projects in Qatar such as the metro, port, and airport have been scaled down or divided into phases to reduce the risk of economic overcapacity, the International Monetary Fund said earlier this month.

Difficulties in planning, coordination and arranging the necessary resources as well as bureaucratic obstacles had also delayed state spending in the past.

Revenue fell 19 per cent to 118.5 billion riyals in the first half, the first decline in this period since the quarterly data series started in 2008. That was more than 54 per cent of the 218.1 billion riyals anticipated in the 2013/14 budget.

The budget surplus in the first half of 2013/14 was 25.2 billion riyals, sharply down from 76.1 billion a year before, the data showed.

The surplus was equivalent to 3.6 per cent of 2012 gross domestic product, a Reuters calculation based on the latest official data showed.

Analysts polled by Reuters in January forecast the OPEC member’s fiscal surplus at 9.0 per cent of GDP in 2013/14, shrinking to 5.9 per cent in the coming fiscal year.

Soaring government spending may push the fiscal balance into a deficit over the medium term when combined with flat production of LNG, falling crude oil output from mature fields and lower hydrocarbon prices, the IMF warned this month.

Plans to spend some $140 billion in the run-up to the World Cup entail a possibility of overheating in the near term and low return and overcapacity in the medium term, the Fund also said.