Finance Minister reports 40 percent of government spend marked for infrastructure deals
Qatari government spending in the
next financial year will at least match the $32bn budgeted
for 2010/11, and the Gulf country's economic growth will
accelerate next year, its finance minister said on Tuesday.
Flush with rising hydrocarbon receipts, the Gulf Arab OPEC
member boosted spending by 25 percent in its 2010/11 budget,
mainly to improve its infrastructure, which lags behind that of
rival regional business and trade hub Dubai.
"Next year's budget will be no less than this year's,"
Finance Minister Youssef Kamal told an investment forum.
"Forty percent of the budget through 2016 will be allocated
for infrastructure projects."
Qatar, the world's top liquefied natural gas exporter,
raised its spending to QR117.9bn ($32.4bn) for
the 2010/11 fiscal year, which started in April.
It projects a budget surplus of QR9.7bn or the current
year, helped by a rebound in oil prices.
Qatar's sovereign wealth fund is one of the world's biggest
Kamal also said the country's debts were not more than 30
percent of gross domestic product, in line with International
Monetary Fund forecasts for government debt of 27.2 percent of
GDP this year, decreasing from 36.7 percent in 2009.
The IMF said in January that Qatar's rising external debt
needed to be monitored following a series of debt issues.
Qatar's economy is seen outperforming most of its fellow
Gulf Arab crude producers, mainly due to gas output expansion
and government infrastructure spending, and Kamal said growth
would quicken further.
"The economy has grown 16 percent this year, and if prices
stay stable in the $70 range, we expect it will grow 21 percent
in 2011," he said.
Kamal, whose 2010 prediction echoes remarks by the country's
central bank governor earlier this week, also said Qatar's
economy is expected to expand at a minimum rate of nine percent
"It's possible, because they've had tremendous growth in the
last two years," said Paul Gamble, head of research at
Saudi-based Jadwa Investment. "But it's definitely beyond what
we were anticipating."
Analysts polled by Reuters forecast the hydrocarbon-reliant
economy to grow 15.5 percent this year before cooling down to
12.8 percent in 2011, compared with 8.7 percent in 2009.
"The bigger overall story is that Qatar's GDP growth is
going to be very strong this year and next, related to the
execution of very large LNG projects," said Daniel Kaye, senior
economist at the National Bank of Kuwait.
"The projects may have come on line a little bit sooner than
the IMF and the ministry of finance in Qatar were assuming."
The IMF sees Qatar's real GDP growth at 16.0 percent in 2010
and 18.6 percent in 2011.