* Infrastructure programme slower to start than many
* Budget suggests Qatar now moving to implement it
* Surplus may fall but likely to stay comfortable
* Budget again assumes low oil price of $65
* Finance minister sees improvement in world economy
By Regan Doherty and Martin Dokoupil
DOHA/DUBAI, April 1 Qatar plans to boost
government spending by 18 percent to 210.6 billion riyals ($57.8
billion) in the 2013/14 fiscal year that began on Monday, the
QNA state news agency quoted Finance and Economy Minister
Youssef Kamal as saying.
Analysts said the planned spending increase suggested that
after a slower start than many businessmen had expected, the
wealthy Gulf state was moving to implement a massive
infrastructure building programme in preparation to host the
2022 World Cup soccer tournament.
"It shows how serious the country is about racheting up
infrastructure development to get ready for 2022," said Farah
Ahmed Hersi, senior economist at Masraf al Rayan bank in Doha.
Simon Williams, HSBC's chief economist for the Gulf, said:
"Budgeting in Qatar should be taken as a statement of intent
rather than a detailed financial plan.
"This budget makes clear that Qatar not only intends to
drive spending upward, it has the means to do so."
The emir of the tiny, gas-rich state on Monday approved a
budget with revenues of 218.1 billion riyals and a planned
surplus of 7.4 billion, well down from a surplus of 27.7 billion
riyals it pencilled in for the previous fiscal year, QNA said.
"The surplus decrease is understandable. When external
accounts are that healthy, there is a natural tendency to
increase spending, and in doing so, you dig into your surplus.
But that's okay - 7 billion riyals is still quite healthy,"
Williams said he was not concerned by the anticipated
surplus decrease. "The real challenge for them is to execute
Qatar's infrastructure building plans envisage spending
about $140 billion through 2022 on a rail system, a new airport,
a seaport, and hundreds of kilometres of major new roads in
addition to stadiums for the soccer tournament.
The building plans, which would tax the skills of a much
larger country, risk causing bottlenecks, waste and a jump of
inflation if they are not managed smoothly.
Kamal said in a statement carried by QNA that the new budget
was based on a number of considerations: "The first of which is
that there are indications that the world economy is on its way
to improvement, despite the fact that these expectations are
marred with uncertainty."
The government decided to keep the oil price which its
budgets assume unchanged at $65 per barrel, Kamal said. Brent
crude oil is currently well above $100.
Economic growth in the world's top exporter of liquefied
natural gas is expected to be more than 4 percent this year,
driven by the non-hydrocarbon sector, especially services and
construction, Kamal said.
Qatar's state budget leaped into a large surplus of 94.6
billion riyals in the July-September period, the second quarter
of its 2012/13 fiscal year, equivalent to 53.9 percent of gross
domestic product in that period, preliminary central bank data
Analysts polled by Reuters in January forecast Qatar's
budget surplus would be 9.1 percent of GDP for the whole 2012/13
fiscal year, narrowing to 7.5 percent in 2013/14.