Qatar’s budget surplus more than tripled to 44.5 billion riyals ($12.2 billion) in the fiscal year ended in March, double the original plan and helped by booming revenues from liquefied natural gas, a prospectus for the country’s potential Islamic bond issue showed on Monday.
Qatar is the world’s top exporter of liquefied natural gas and its fiscal surplus for 2011/12 was equivalent to 7 per cent of 2011 gross domestic product, according to a Reuters calculation, up from the original 22.5 billion-riyal plan.
That puts the government in a comfortable position as it plans to spend more than 10 per cent of GDP on average on infrastructure in the run-up to hosting the soccer World Cup tournament in 2022.
In the previous fiscal year Qatar posted a surplus of 12.8 billion riyals, or 2.8 per cent of GDP.
The OPEC member’s expenditure surged 11 per cent to a record 158.9 billion riyals last fiscal year according to preliminary data, the prospectus said, well above the 139.9 billion planned.
“Due to a significant wage and pension increase … for Qatari government employees, government expenditure for salaries and wages is expected to significantly increase for future budgets,” the prospectus said.
In September, Qatar, which has avoided the social unrest that rocked the Arab world last year, raised basic salaries and social benefits for state civilian employees by 60 per cent, while military staff received 50-120 per cent increases.
Spending on government wages and salaries rose more than 9 per cent to 25.2 billion riyals in 2011/12, the prospectus showed.
Qatar is holding roadshows in Kuala Lumpur and Singapore on Monday and Tuesday respectively, arranging banks said last week, following which a sukuk may be issued, subject to market conditions.
The country did not give a reason for the sukuk issue. Recently, the government tapped international markets to refinance current debt and obtain low-cost financing for its infrastructure programme and other purposes, the prospectus said.
The Gulf Arab state plans to boost spending further by over 12 per cent to 178.6 billion riyals in the fiscal year that began in April, including on wages, services and infrastructure, but expects to see a still comfortable surplus of 27.8 billion.
Revenue soared by nearly 31 per cent to an all-time high of 203.4 billion riyals in 2011/12, thanks to a jump in gas royalties and taxes as well as the business and corporate income tax, the prospectus showed.
The original revenue plan was 162.5 billion riyals based on a conservative oil price estimate of $55 per barrel.
Oil and gas-related revenue accounts for roughly 81 per cent of Qatar’s overall budget income.
Qatar’s total outstanding indebtedness stood at $56.9 billion as of the end of March, or 32.8 per cent of GDP, the prospectus also showed.