Qatar is expected to widen its budget surplus in the current fiscal year, owing to high oil prices and a surge in exports of its liquified natural gas (LNG), the Emirate24 online news said on Thursday, quoting a key Saudi bank. Qatar real gross domestic products (GDP), which has recorded the world's highest growth over the past few years, would still maintain high growth of around 17.5 per cent in 2011 before tumbling to nearly 5.5 per cent in 2012, Emirate24 citing the Saudi American Bank Group (SAMBA) November economic bulletin. Citing Qatari government data, SAMBA said the country's fiscal surplus slipped to four percent of GDP in 2010/2011, reflecting the combination of an almost 20 percent increases in spending and a substantial decline in non-hydrocarbons revenues, which offset a healthy 17 percent rise in hydrocarbons revenues. It said the revenue decline reflected the introduction of a lower corporate tax rate in 2010 and falling investment income, with the latter principally related to the drop in Qatar Petroleum's profits in 2009 when oil prices slumped. This resulted in lower dividend payments to the budget in fiscal 2010/2011, the report said, adding that a rebound can be expected in 2011/2012 on the back of stronger hydrocarbon prices and production. “As is usual, the 2011/2012 budget is based on highly conservative oil prices assumptions of $55, when the actual price is likely to be almost twice that. Consequently the fiscal outcome will be widely different from the presented budget with both revenues and expenditures exceeding targets,” it said. But it noted that budgeted capital spending remains large, with almost $16 billion set aside for “megaprojects” which will provide a stimulus to growth. In addition, in September the government raised Qatari nationals' public sector and military wages and pensions by between 50-120 percent. With Qataris making up 58 percent of the labour force in government departments, very crude estimates suggest this could add another $two billion to the annual wages and salaries bill, the report said.
