By Satish Kanady
DOHA: Qatar is tightening the screw on government expenditure, if figures disclosed by the Ministry of Development Planning and statistics (MDPS) yesterday are any indication.
According to the country’s Economic Outlook for 2015-2017 released by the Ministry yesterday, the preliminary budget estimates as of March 2015 show an 18.1 percent decline against actual spending in Financial Year 2013-14; 19.7 percent capital and 17.4 percent current. “These lower numbers may to some extent reflect tighter scrutiny over spending, but with revenue, upward revisions are expected”, the document noted.
The numbers suggest that the current expenditure estimates for the first 12 months of FY2014/15 are less than FY2013/14 outcomes across all expenditure categories. The largest gaps are for wages and salaries, health and general administration.
Preliminary data suggests that recorded outlays for wages and salaries are 2.7 percent lower than previous fiscal year actual. Delays in recording outlays on wages and salaries have been negligible in the past, suggesting that spending on this category may have fallen for the first time in 10 years.
A breakdown data of economic performances of non-hydrocarbon sector shows that the lone service subsector where growth slowed in 2014 was government, household and social services.
Most value added in the government sector is accounted for by wages and salaries, and government steps to rein in expenditure growth in 2014 kept growth in the wage bill in check.
Preliminary data for financial year 2014/15 indicate a reduction in the wages and salaries category for the first time in a decade.
According to the Ministry document, Qatar’s economic expansion in 2014 was mainly spearheaded by the non-hydrocarbon sector, growing at 11.3 percent with all subsectors posting solid growth. As in 2013, service activity was the major driver of the country’s growth in this sector, contributing 4.4 percentage points.
Trade, restaurants and hotels was the fastest-growing component, at 14.1 percent, propelled by the rise in population and strong growth in tourism, according to “Qatar Economic Outlook 2015-2017”.
Growth in the finance, insurance, real estate and business services subsector accelerated, expanding by 12.4 percent year on year in 2014. Much additional credit was offered in response to demand from contractors working on large infrastructure project, which also drove high growth in the insurance market. Transport and communications increased by 10.4 percent, driven by Qatar Airways’ continued expansion and by the opening of the new Hamad International Airport early in the year.
The only service subsector where growth slowed in 2014 was government, household and social services. Buoyed by Qatar’s huge investments in infrastructure and real estate, construction output grew at a rapid 18.0 percent, contributing 2.2 percentage points to overall growth. Large projects include Qatar Rail and real estate developments for Lusail City and Musheireb.
Compared with services and construction, Manufacturing grew at a tepid 4.1 percent, contributing just 0.4 percentage points to aggregate growth. Petrochemical output grew by 8.4 percent, half the rate of a year earlier. Growth in fertilizers, too, slowed appreciably from 2013, with output inching up by just 0.8 percent. Growth in other manufacturing industries held steady at 5.6 percent, close to 2013’s rate.
The Peninsula
