DOHA: Qatar yesterday announced budgetary estimates for the extended period of nine months, from April 1 to December 31, 2015 whose focus continues to be on mega development projects and those related to FIFA 2022 World Cup.
And, importantly, despite falling oil prices in the global markets, the country expects to post a budgetary surplus of an incredible QR137bn ($37.6bn) in the 2014-15 budget that ends on March 31 and which is being extended to December-end.
Revenue has been estimated in the extended budget at QR169.3bn ($46.5bn) while expenditure has been estimated at QR163.8bn ($45bn), the estimated surplus being QR5.5bn ($1.5bn). A major portion (QR65.6bn or $18bn) of the total allocations of QR163.8bn for spending in the interim budget has been earmarked for mega development projects.
Despite the dip in energy prices in the global markets, the government continues with its emphasis on its development program.
“The pro rata extension of expenditure budget for the next nine months shows the government’s commitment to continuing executing its extensive development programme,” said Minister of Finance H E Ali Shareef Al Emadi.
He stressed in a statement the focus remains on major projects in health, education, infrastructure and transportation as well as projects related to FIFA 2022. The country will follow a new January-to-December fiscal year from 2016 and that necessitated extending the 2014-15 budget (that ends on March 31) to December 31, 2015.
The estimates in the extended or interim budget are based on an oil price per barrel of $65. The 2014-15 budgetary estimates were also based on an oil price of $65 a barrel. However, since the average oil price in the 2014-15 fiscal that ends on March 31, should be much more than the assumed crude price, surplus estimates far exceed the initial estimates (QR7.3bn) and now expected to be a huge QR137bn ($37.6bn).
The Ministry of Finance yesterday formally announced that the fiscal year 2014/15 will be extended until the end of 2015 so that a new financial year could be followed from 2016.
With the expected revenue for the extended budget estimating QR169.3bn, the estimated revenue during the full 21 months (2014/15 fiscal plus extended nine months) touched QR395.0bn; and the total expenditure during the full 21 months is estimated at QR382.2bn, with an expected surplus of QR12.8bn for the full 21 months ending December 31, 2015, the Ministry of Finance said yesterday.
The projected revenue for 2014/15 fiscal was QR225.7bn and expenditure stood at QR218.4bn, with an expected surplus of QR7.3bn.
Announcing the budget proposal here yesterday, Al Emadi said the preliminary estimates of the budget during the period from April 1, 2014 until March 31,2015 is expected to show a surplus of about QR137bn. Al Emadi also announced that the budget estimates of revenue and expenditure for the fiscal 2014/15 will be extended on pro rata basis.
The pro rata extension of expenditure for the coming nine months, despite the dip in energy prices in global markets, demonstrates the government’s commitment to continue executing its extensive development programme. The focus will remain on major projects in health, education, infrastructure and transportation as well as projects related to FIFA World Cup 2022, the minister said.
If average oil prices fall below the budgeted level, Qatar is in a position to cover all budgeted expenses during the coming period, given its strong financial position and reserves. Qatar’s strong financial position is clearly demonstrated in the recent inaugural credit rating from Fitch Ratings, which granted an “AA” rating with stable outlook, one of the highest investment grade levels, he said.
The extended budget proposal has set aside maximum allocation for major projects at QR65.6bn, pushing the total allocation for this sector to a whopping QR153.1bn for the full 21 months. QR53.4bn has been set aside to Current Expenditure, increasing the sector allocation to QR124.5bn from its 2014/15 fiscal’s allocation of QR71.1bn. With earmarking QR35.6bn, total allocation to the”Wages and Salaries” for the full 21 months jumped to QR83.1bn from the 2014/15 fiscal’s QR47.5bn.
He said the extension of the 2014/15 budget reflects the government’s commitment to the completion of its programs and projects outlined in the country’s National Development Strategy 2011-16 and to the various development pillars of Qatar National Vision 2030.
“The government is committed to implement its extensive development plans and is allocating QR65.6bn for major projects during the next nine months, so the total allocations for major projects during the full 21 month fiscal period will reach QR153.1bn”, he added.
He said the government is taking effective steps to maintain inflation at acceptable levels . Inflation stood at 3 percent in 2014 and it is expected to continue at reasonable levels during the coming years.
Al Emadi said the Government would continue its efforts to promote the private sector role to achieve strong economic growth in non-oil and gas sector. “The government will continue its policies to further enhance the private sector’s participation in economic development activities through a number of additional initiatives to avoid competition between government-owned enterprises and private sector companies. The government is also encouraging government entities to outsource services to the private sector”, he added.
Al Emadi said Qatar’s economy will continue to perform strongly, with an estimated real GDP growth of 6 percent in 2014, led by the non-oil and gas sector with a double-digit growth rate of 12 percent. “Qatar’s economy is expected to grow at around 7 percent in 2015, underpinned by the ongoing strong growth in the non-oil and gas sector as the government continues to implement major projects.”
The Peninsula
