Emir H H Sheikh Tamim bin Hamad Al Thani yesterday issued Law No 18 of 2016 adopting Qatar’s general budget for the fiscal year 2017, which will be effective from January 1 next year.
The budget has a projected expenditure of QR198.4bn against an estimated revenue of QR170.1bn, making an expected budget deficit of QR28.3bn.
Minister of Finance H E Ali Sherif Al Emadi said yesterday that the projected total revenue for the upcoming fiscal year is 9 percent more than the 2016 budget, adding that the 2017 budget is based on an oil price assumption of $45 per barrel and efforts to boost non-oil revenues. Allocations for the key sectors of health, education and infrastructure projects amount to QR87.1bn, representing 43.9 percent of total expenditure, reflecting the government's continued commitment to delivering high quality social services, said the Minister.
He noted that the main goal while working on the budget was to ensure that major projects are implemented and completed as well as projects related to the 2022 World Cup in line with the approved schedule. Funds worth QR10bn have been allocated for rail projects and Hamad Port, along with a large number of roads including the Lusail road, Al Rayyan road, Dukkhan road, the new ring road for trucks and the new Al Khor road. As for total expenditure allocated to key sectors in the budget, health and education were allocated 22.7 percent, transportation and infrastructure had 21.2 percent, while other sectors were allocated 56.1 percent.
Funds to the tune of QR24.5bn have been allocated to the health sector, representing 12.3 percent of total expenditure in 2017 budget. This will finance many projects including the final stage of Sidra Medical and Research Center.
There are also allocations to expand facilities at Hamad General Hospital and complete the Labourers' Hospital in the Industrial Area, besides expansion in Hamad General Hospital.
Al Emadi said that the government also continues to focus on education, allocating QR20.6bn to the sector, which represents 10.4 percent of the total expenditure.
Funds have been allocated for the construction of 17 new schools and nurseries and the completion of another 28 schools and nurseries. There are also funds for new projects in Qatar University, including the faculties of Education, Pharmacology, Law, and laboratories for the Faculty of Sciences.
Also, there are funds for the completion of projects in the Qatar Foundation, including research facilities, infrastructure and transportation in Education City.
The total expenditure, under the 2017 budget, will be 2 percent lower compared to QR202.5bn in 2016, the Minister said, adding that this results in a budget deficit of QR28.3bn, down by 39.1 percent compared to the budgeted deficit of QR46.5bn in 2016.
The allocations to ‘Major Projects’ have increased by 2.6 percent to QR93.2bn, representing 47 percent of the total expenditure in 2017.
Transportation and infrastructure projects have been allocated QR42bn, representing 21.2 percent of the total.
Infrastructure projects include land reclamation in north and west Doha, Al Khor, Al Mashaf, Al Wakra and Al Wukair.
While the allocation to ‘Salaries and Wages’ have been reduced by 3 percent from QR49.5bn to QR48 bn, and allocation to ‘Current Expenditure’ have been cut by 9.6 percent from QR58.5bn to QR52.9bn.
The Minister noted that this became possible as a result of efforts towards maximising efficiency in the current expenditure, such as the consolidation of ministries. However, allocations to social sectors ("Chapter III – Minor Capex") were up by 16.2 percent from QR3.7bn to QR4.3bn to implement several new health and education facilities across the country.
"This demonstrates our commitment to complete all projects in the main sectors on schedule. An increase in construction activities on various projects will lead to higher allocations for major projects during the coming three fiscal years," said the Minister.
The total cost of committed projects is at QR374 bn, excluding oil and gas projects or projects by government owned companies. It is also expected that the government will sign contracts for new projects worth a total of QR46.1bn during 2017, the Minister said. This will include infrastructure and transportation projects worth QR25bn, projects related to World Cup 2022 facilities amounting to QR8.5bn, health and education projects worth QR5.8bn, and projects in other sectors of a total value of QR6.8bn, he added.
Al Emadi stressed that the implementation of major development projects will have a positive impact on economic growth as the International Monetary Fund is expecting Qatar to achieve an overall GDP growth rate of 3.4 percent in 2017, the highest in the GCC region. Also, the implementation of development projects will help sustain development in non-oil sectors, which achieved a strong growth rate of 5.8 percent during the first six months of 2016.
He said that the 2017 budget assumes a cyclical deficit due to a combination of low energy prices and a period of high development expenditure.
The Minister added that Qatar will continue to finance the deficit through issuing debt instruments in the local and international financial markets, while maintaining its reserves and investments.
He added that the government will also continue efforts to control inflation at acceptable levels through coordinated fiscal and monetary policies through cooperation between the Ministry of Finance and Qatar Central Bank, noting that projected inflation remain at acceptable levels.
Al Emadi said that projects in the health sector include the expansion of Hamad General Hospital, Hamad Medical Corporation as well as pledged health centres that are expected to complete in Al Karaana, Al Ghuwariyah, Al Rawda, Al Muntazah, Al Naeem and Umm Salal, in addition to health centres under construction in Qatar University, Al Wajba, Al Waab, Muaither, and other health centres in Al Khor, Al Sadd, Al Shamal, Al Mashaf, Al Wakra, Ain Khalid, and the final construction phases at Sidra Medical and Research Center.
