Qatar's state budget surplus narrowed to 2.9 percent 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 QAR5.1bn (US$1.4bn) in October-December 2011, down from a hefty surplus of QAR42.2bn, or 25.6 percent of gross domestic product, in the previous quarter, preliminary estimates published by the central bank showed.
On a cumulative basis, the budget surplus reached QAR45.1bn in the first three quarters, or 7.1 percent of 2011 GDP, a Reuters calculation based on official data showed.
The government had targeted a surplus of QAR22.5bn in the fiscal year, which ended in March.
Revenue dropped almost 10 percent to QAR55.8bn in October-December from a year earlier, bringing cumulative income for the first three fiscal quarters to 102 percent of the 2011/12 target. It fell 28 percent compared with July-September.
Government expenditures jumped 62 percent in the period from a year ago to QAR50.7bn and met 87 percent of the full-year target on a cumulative basis, the data showed. Spending surged by 42 percent from the previous quarter.
Qatar's economy is expected to slow this year from 14 percent in 2011 as the impact of two decades of gas output expansion fades. But the government plans to boost spending by 27 percent in the new 2012/13 fiscal year is likely to help keeping it in high single digits.
In its 2011/12 budget, the cash-rich country pencilled in spending worth QAR139.9bn. 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 percent in September, while military staff got 50-120 percent rises.
The measures were expected to add an estimated US$1.6bn 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 US$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 QAR347bn during the five years to 2016 in its development strategy, with more than US$65bn of that expected to be on infrastructure.