Qatar to run budget deficit next year

DOHA, June 12, 2015 – Despite a rebound in crude oil production, Qatar has been forecast to run a budget deficit in 2016 for the first time in 15 years. The drop in oil prices had not been included in earlier budget plans. Massive spending on infrastructure for the 2022 World Cup has further contributed to the expected negative balance.

Oil production has averaged 709,000 barrels per day (bpd) in 2015. It fell to 635,000 bpd in April and began to climb back in March, with an average of 708,000 bpd.

Next year, the country expects a fiscal shortfall of 4.9 percent of GDP, said the Development Planning and Statistics Ministry on its website. In 2017, it forecast a reduction to 3.7 percent.

“If they persist, lower oil prices will narrow the government’s fiscal cushion but our considerable financial reserves will provide an ample buffer,” Qatar’s Development Planning Minister Saleh Al Nabit said in a statement. “Important capital spending plans will proceed.”

Qatar plans to spend nearly $200 billion on infrastructure projects over the coming decade.

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