Budget keeps QR74.88bn for public projects

DOHA: Qatar yesterday unveiled the budgetary estimates for the current financial year (2013-14) — the largest in its history so far — earmarking a record over QR210bn (QR210.6bn, or $57.9bn) for public spending, up 18 percent over the previous budget.
The spending in the previous budget was QR178.5bn. The government has allayed fears of higher spending causing a price rise and said it will be on an alert and manage inflationary pressures through effective fiscal and monetary measures. The maximum increase is on spending on public projects — 40 percent — with the allocations totalling a whopping QR74.88bn as against QR62.11bn in the last budget.

A highlight, though, is that the outlay for education has been upped 15 percent with the government saying this is a crucial shift of the Qatari economy as the country marches towards a knowledge-based economy.

“This is a key step ahead as the education sector now has a share of 3.8 percent in the country’s GDP,” the Minister of Economy and Finance H E Yousuf Hussein Kamal said, reports Qatar News Agency. It is important to note that the estimates make a large portion of the allocations for the education sector on research and development.
Likewise, as expected, healthcare has also been accorded priority with spending on the sector going up 13 percent over the last fiscal year. The Minister said the outlay includes spending on Al Wakra Hospital (making it full-capacity), Sidra Hospital and building several specialised hospitals for women and children.

The aim is to bolster the non-energy sectors in an effort to help raise their share in the country’s GDP in line with the national policy to diversify the economy away from oil and gas.
QNA earlier reported that the Emir H H Sheikh Hamad bin Khalifa Al Thani issued a Decree (No. 9 of 2013) endorsing the state’s general budget for the current fiscal year (April 1, 2013 to March 31, 2014).

Total revenues estimated are QR218bn ($60bn), up six percent over the previous fiscal year (QR206.27bn). Much of the estimated increase is expected through tax collections. The ‘tax holiday’ tenures of companies that enjoyed that privilege are expected to end this financial year, the Minister said explaining raised revenue estimates.

The surplus estimated is QR7.4bn, down from QR27.7bn in the previous budget — a result, according to analysts, of higher allocations for spending on development and an expected lower band of oil prices in the global markets during the current financial year.

The budgetary estimates are based on an oil price of $65 per barrel–unchanged from the previous budget. Analysts said they hoped the average crude price in the international markets to be much more than the budgeted level, so the surplus could be much higher by 2013-14-end.

Current expenditure has been estimated at QR77.52bn, up 27 percent over the previous fiscal year, while salaries and wages have been given an outlay of QR44.26bn (up 24 percent) in the current budget.

Capital expenditure is also up (nine percent), from QR11.35bn last fiscal to QR13.93bn in the current financial year.

QNA quoted Yousuf Hussain Kamal as saying that the budget reflects the way forward towards achieving the lofty goals set within the Qatar National Vision 2030 and the National Development Strategy (2011-16).

About increased spending, he said Qatar faced the challenge of maintaining the momentum of development at a time the global economy was still struggling. Qatar has managed to ride over the global financial crisis since its onset in 2008 and its impact is still being felt here.

The message this budget sends across is that “We are on the right track as for executing the development plans as part of National Development Strategy (2011-16) is concerned,” said the Minister.

The current budget has been prepared in the light of several facts: one, that the world economy is showing signs of improvement but uncertainties mar expectations; two, the estimates are based on a conservative oil price of $65 per barrel; and, three that the pace of development has been maintained.

He said the country’s economy was expected to grow over four percent backed mainly by the growth of the non-hydrocarbons sector. The budget reflects the state policy of supporting the private sector in helping widen its role in the national economy.

The estimated surplus will be used to enhance the reserves of the Qatar Central Bank and other state funds, repay the debt and back the Qatar Investment Authority (QIA).

“We will continue to monitor the ratio of debt to the GDP as the aim is to achieve sovereign debt rating of AAA over the next three years,” said the Minister.

The Peninsula 2013, Apr 02 2013