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Tue 30 Mar 2010 09:20 PM

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Qatar to boost spending by 25% in 2010/2011

Overall economic conditions encouraging for Qatar's financial policy - Emir.

Qatar to boost spending by 25% in 2010/2011
ENCOURAGING CONDITIONS: Qatars Emir believes that local and international economic conditions are encouraging Qatar to press ahead its current financial policy. (Getty Images)

Qatar expects to book a budget surplus of $2.67 billion in the fiscal year of 2010/11 as rising oil prices counter a 25 percent jump in spending, state news agency QNA reported on Tuesday.

QNA cited finance ministry figures in its initial report, and also later issued a statement from Qatar's ruler Emir Sheikh Hamad bin Khalifa al Thani, giving the headline figure for the budget deficit.

A price rebound from last year's lows is helping Gulf oil exporters boost their budget revenues, allowing them to keep fiscal stimulus packages in place at a time when other countries are beginning to consider spending cuts.

The world's largest natural gas exporter had planned a budget deficit of $1.59 billion for the current fiscal year. It has yet to release the final data.

Qatar drafted its budget for the coming fiscal year, which starts in April, with expenditures of $32.38 billion, above the $25.95 billion budgeted for the current year, QNA reported.

Revenues were set at $35.01 billion for fiscal 2010/11, compared with $24.3 billion in 2009/10.

In a statement, Qatar's Emir, Sheikh Hamad bin Khalifa al Thani said: "The overall international and local economic conditions are encouraging us to press ahead with our conservative financial policy and to estimate the crude oil barrel price for the state's general budget preparation purposes at $55."

The Gulf country had budgeted an oil price of $40 a barrel in fiscal 2009/10. The US benchmark crude traded at around $82 dollars a barrel on Tuesday.

Finance ministry officials were not immediately available to confirm the figures.

The International Monetary Fund said in February Qatar had indicated that it would keep spending at a moderate level to stave off demand led price pressures.

Analysts polled by Reuters expected Qatar to reach a fiscal surplus of 11.5 percent of gross domestic product in calendar 2010, up from 7.5 percent in the previous year on higher oil prices and massive expansion of the country's gas facilities.

Qatar's economy is expected to largely outperform other economies in the world's largest oil exporting region with the government forecasting GDP to jump by 16 percent in 2010/11. (Reuters)

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