DUBAI (Reuters) - Qatar’s 2018 state budget plan, released by the finance ministry on Tuesday, projects slightly higher spending and a marginally smaller deficit than this year’s plan.
Spending is expected to total 203.2 billion riyals ($56 billion), up 2.4 percent from the budget plan for 2017, with revenue climbing 2.9 percent to 175.1 billion riyals.
That would leave a deficit of 28.1 billion riyals next year, down 1.1 percent from this year. The ministry said next year’s shortfall would be financed through debt issues.
The budgets for both 2017 and 2018 assume an average oil price of $45 per barrel. Brent oil is now around $65 compared with this year’s average of about $54, so if current prices hold next year, Qatar’s deficit could be smaller than projected.
The rise in next year’s spending will mainly be due to the launch of new public facilities such as schools and hospitals, the ministry said, adding that the government would also focus on completing infrastructure for the 2022 soccer World Cup.
The government expects to award 29 billion riyals of contracts to support growth in the private sector next year, part of a drive to diversify and strengthen the economy as it faces a boycott by four other Arab states.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties with Qatar in June, accusing it of supporting terrorism, but the ministry’s statement said the outlook for the economy remained extremely positive.
The projected rise in next year’s revenue is due to an expected increase in non-oil revenue, the ministry said without elaborating.
Before the boycott was imposed, the government said it would introduce a 5 percent value-added tax in 2018. But authorities have not yet announced the completion of preparations for the tax or confirmed that it will go ahead despite the boycott.
Reporting by Andrew Torchia; Editing by Peter Graff and Hugh Lawson
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