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Thu 24 Mar 2011 09:09 AM

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Qatar to boost 2011-12 spending, no bond plans

World's top LNG exporter, so far, had raised spending by 25% in the current fiscal year

Qatar to boost 2011-12 spending, no bond plans
QATARI SPENDING: Qatar will boost its government budget for the new fiscal year 2011-12 but has no immediate plans to issue sovereign bonds (Bloomberg News)

Qatar will boost its government

budget for the new fiscal year 2011-12 but has no immediate

plans to issue sovereign bonds, the Gulf Arab state's finance

minister said on Wednesday.

The world's top liquefied natural gas exporter, which has

escaped unrest sweeping through the Arab world so far, had raised

spending by 25 percent in the current fiscal year, helped by

robust oil prices and gas output expansion.

"Next week, we will announce the budget. It is bigger than

last year's," Youssef Kamal told reporters on the sidelines of a

meeting of Gulf policymakers in Doha.

Kamal echoed his recent comments that the budget would be

based on oil prices of not more than $60 per barrel but declined

to give further details.

Earlier in March, he said the budget for the new fiscal

year, which starts in April, would likely be based on an oil

price of between $55 and $60 per barrel.

Worried by the spreading unrest, autocratic governments

across the Gulf offered handouts worth billions of dollars to

calm social tensions at home.

In its 2010-11 budget, the cash-rich OPEC member pencilled

in spending worth QR117.9bn ($32.4bn) and a

surplus of QR9.7bn, or 2.7 percent of gross domestic

product.

"We will have some surplus in the [current] budget," Kamal

said without further details.

Analysts polled by Reuters in March expected a surplus of

11.5 percent of GDP in the current fiscal year and 12.1 percent

in 2011-12.

Qatar, one of the world's top investors through its

sovereign wealth fund, plans to raise spending on infrastructure

in the run-up to hosting the 2022 soccer World Cup.

The country issued a QR50bn bond to local banks in

January, which sources said was to raise funds for development

projects and to drain excess money from the banking system.

Political unrest in the region, which also spread to nearby

Bahrain, Oman and Yemen, has fuelled a surge in oil prices well

above $100 per barrel.

The tiny Gulf Arab state, one of the world's fastest growing

economies, will see GDP expanding by 18 percent or more this

year, Kamal also said, reiterating recent remarks.

Social tensions sweeping through the region are not expected

to impact growth prospects in the Gulf state, he said.

"We are a stable country with a AA rating. We have good

growth, may be above expectations," Kamal said.

Qatar, whose hydrocarbon-based economy is forecast to expand

at a double-digit clip this year, assumed an oil price of $55

per barrel in its 2010-11 budget.