Giving a strong push to Qatar’s preparations for the 2022 FIFA World Cup, the Emir H H Sheikh Tamim bin Hamad Al Thani yesterday issued a decree endorsing the country’s highest ever general budget for the fiscal 2014-15 with projected revenues of QR225.7bn, 3.5 percent higher than that in the last fiscal.
The government spending for the new fiscal is projected at QR218.4bn, up 3.7 percent with an expected surplus of QR7.3bn. The surplus forecast for the new fiscal is down 0.1 percent compared to the last fiscal’s QR7.4bn.
The increase in spending has been mainly dedicated to the completion and implementation of key development projects that have been allocated QR87.5bn, up by 16 percent from the previous budget, H E Ali Sherif Al Emadi, Minister of Finance announced.
For the third straight year, the budget assumed a conservative oil price of $65 a barrel when calculating projected revenue, which means the surplus could turn out higher than forecast. Total expenditure on education, health, infrastructure and transportation has risen to 54 percent in the financial year 2014-15 budget compared to 48 percent in the previous budget. This is expected to provide a leap forward for these sectors.
The projected spending shows nearly half of the total expenditure will go for infrastructure development and social benefits, with 35 percent of the total allocations to infrastructure projects.
Infrastructure appropriations are the largest in the new fiscal, with a 22 percent increase to QR75.6bn to enable the completion of major infrastructure expansion and development projects related to Qatar 2022 FIFA World Cup. The budget has earmarked QR26.3bn for the education sector, up 7.3 percent from the previous budget. The health sector will also get a boost with the allocations reaching QR15.7bn, a 12.5 percent increase on allocations in the last budget.
Allocations to provide housing for Qatari nationals have increased to QR3.3bn, up 18 percent from the previous fiscal. These funds will be used to complete 3,700 housing units under construction and to build 2,300 new homes benefitting 6,000 nationals, ensuring that there is no waiting list for housing.
Lending strong support to the private sector’s participation in Qatar’s development, the finance minister eemphasizedthat the government will continue to encourage and support the private sector. In the next stage, the private sector will witness a strong growth and play a fundamental role in the country’s development.
“The resilient growth anticipated in the non-oil sector offers the private sector an opportunity to boost its contribution to GDP growth, providing for further economic diversification and overall sustainable development…… The government adopts a set of policies to support the private sector, such as avoiding competition between the public and private sectors in the local market, assigning more of the implementation of projects to the private sector and encouraging the ministries and state institutions to outsource its supporting business services to private sector”, the minister said. The Peninsula
For salaries and wages, the budget earmarked QR47.5bn, up 7.3 percent from the previous budget’s QR44.3bn. Current expenditures shrink to QR71.2bn from QR77.5bn. Minor capital expenditure dropped by 12.1 percent to QR12.3bn.
The construction sector was buoyed by the announcement. “The significant allocations to the construction sector will certainly help augment the ongoing projects and Qatar’s future projects as well. The budget announcements will also help boost Qatar’s private sector”, a top market player told this daily.
Allaying fears of any potential inflationary pressures due to the country’s continuous expansionary measures, the finance minister said there would be continuous coordination between financial and monetary policies. The Ministry of Finance will work in coordination with the Qatar Central Bank (QCB) to control inflationary pressures.
“Qatar’s huge public spending decision is part of the country’s well-calibrated policies. The policy makers can take effective steps to help control inflation at acceptable levels”, said Dr R Seetharaman, Group CEO, Doha Bank.