MENAFN - Arab News
Qatar heading for another record fiscal surplus
(MENAFN - Arab News) evised figures for Qatar's fiscal outturn in 2011/12 show that revenue, expenditure and surplus all reached record levels. QNB Group expects to see a similar pattern in 2012/13, when the surplus is forecast to rise to QR58 billion.
The revised figures from the Ministry of Economy and Finance were published in Qatar Central Bank's recent quarterly bulletin. These substantially updated the initial official fiscal estimates for the fiscal year that ended in March.
The updated figures show that revenue grew by 42 percent to QR220 billion (60 billion), surging ahead of the previous record set in 2009/10. Expenditure was also at a record level of QR166 billion, up 16 percent on 2010/11. As a result there was a fiscal surplus of QR54 billion, or 8.6 percent of GDP, higher than the 7.1 percent given in the initial estimates and well above the 2.8 percent recorded in 2010/11.
The core of Qatar's fiscal revenue naturally comes from oil and gas. This rose by 35 percent to QR179 billion in 2011/12 as oil prices averaged 113 a barrel. It is comprised of three components: Royalties and taxes from oil, those from gas, and a dividend drawn from Qatar Petroleum (QP).
Combining the QP dividend with oil and gas taxes and royalties shows that in 2011/12, at least 81 percent of revenue was related to the hydrocarbons value chain.
Significantly, the "other revenue" line of the budget, which includes all the non-hydrocarbon sources of revenue, surged by 78 percent in 2011/12. The largest part of this revenue comes from corporate taxation which dipped in 2010/11, following the reduction in the tax rate on foreign companies to 10 percent, but it has more than doubled in the latest year as corporate profits have expanded. The 2012/13 budget forecasts a further sizable increase in this area and expects further corporate profit growth to boost the tax revenue to QR54 billion.
On the expenditure side, the sharpest annual increase in 2011/12 was in interest payments, up 72 percent because government debt had increased by 54 percent during the 2010/11 fiscal year. However, at just QR9.6 billion, interest payments only comprised 6 percent of expenditure. Salaries and wages also registered a sizable increase, by 28 percent, largely as a result of pay increases for nationals introduced in September 2011.
Overall current expenditure rose by 17 percent and was 41 percent above budget, a larger overspend than usual, while capital expenditure rose by 13 percent but was 14 percent below budget.
The 2012/13 budget expects revenue of QR206 billion, which would be slightly down on last year, based on a conservative oil price of 65 a barrel. The oil price has already averaged 106 in the first four months of the fiscal year, and so hydrocarbon revenue should be comfortably above budget. QNB Group forecasts a 10 percent rise in revenue to QR243 billion.
The budget set aside QR116 billion for current expenditure, almost the same as in 2011/12, whereas QNB Group expects this to rise slightly to QR124 billion. The capital budget is set at QR62 billion, a 24 percent rise on the 2011/12 outturn. This is close to QNB Group's forecast, as the imperative to get major infrastructure projects underway should ensure that the allocated budget is almost fully utilized.
Overall, QNB Group expect a surplus of QR58 billion in 2012/13, which would be twice the level that is budgeted (QR28 billion) and set a new record in absolute terms.
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