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Tue 2 Nov 2010 06:31 PM

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State spend in next Qatar budget to match $32bn of 2010

Finance Minister reports 40 percent of government spend marked for infrastructure deals

State spend in next Qatar budget to match $32bn of 2010
Qatar, the worlds top liquefied natural gas exporter, raised its spending to QR117.9bn ($32.4bn) for the 2010/11 fiscal year
State spend in next Qatar budget to match $32bn of 2010
Qatars sovereign wealth fund is one of the worlds biggest investors.

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

after 2016.

"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.

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