Qatar's economy is likely to grow 6.3 percent this year, much faster than previously expected and well ahead of other oil exporting Gulf states, helped by robust domestic demand, a report showed on Tuesday.
Gross domestic product growth in the world's top exporter of liquefied natural gas is forecast to hit 7.8 percent in 2015, its fastest rate since 2011, said the report of the Ministry of Development Planning and Statistics. It was 6.5 percent in 2013.
"Although receding hydrocarbon output is seen checking overall growth in 2014, with the commissioning of the Barzan gas project in 2015 a step increase in gas output is expected, taking aggregate growth higher," the ministry said.
By comparison, Qatar's fastest growing neighbour, the United Arab Emirates, is expected to expand by 4.3 percent this year.
Qatar had previously forecast 2014 growth of 4.6 percent, citing reduced output from maturing oil fields.
The OPEC member's fiscal surplus is forecast to narrow to 9.3 percent of GDP in calendar 2014 and to 5.5 percent in 2015 from an estimated 12.9 percent in 2013, as the government's large investment programme gathers pace ahead of hosting the 2022 World Cup soccer tournament.
In the 2013/14 fiscal year, which ended in March, the government's overall surplus was estimated at QR94.6 billion ($25.98 billion), equivalent to 12.6 percent of GDP and up from 11.2 percent in the previous year, the report said.
"Most of the increase came from the transfer of QP's (Qatar Petroleum) entire financial surplus to the government," it said.
Qatar Petroleum started transferring its entire financial surplus to the government from 2013. Previously, a part went to the government as investment income, part was retained on the company's balance sheet and another was used to provide fresh capital to the Qatar Investment Authority.
The price of oil Qatar needs to balance its budget is forecast to rise to $52.9 per barrel in 2014 and $67.7 in 2015 from $42.3 last year under the baseline scenario, the ministry said, below current levels of $114 for the Brent crude.
Total budget spending fell 1 percent in 2013/14, the first decline in a decade, as a 2.4 percent rise in capital spending was outweighed by a 2.1 percent drop in the current expenditure.
Qatar, which pegs its riyal currency to the U.S. dollar, plans to spend some $210 billion on infrastructure, including roads and stadiums ahead of the World Cup.
Inflation is expected to average 3.0 percent in 2014, less than 3.5 percent seen in December, and edge up to 3.4 percent in 2015 with strengthening domestic demand.
"Risks of accelerating inflation seem contained at the moment, but consumer price pressures would pick up if imported inflation gathered pace," the report said.
Analysts polled by Reuters in April forecast Qatar's GDP would grow 6.1 percent in 2014 and 6.0 percent in 2015, and inflation would reach 3.6 percent and 4.0 percent, respectively.