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Qatar faces first budget deficit for 15 years
[DOHA] Qatar faces a budget deficit in 2016 for the first time in 15 years because of the oil price slump but vowed Wednesday to forge ahead with huge spending plans as 2022 World Cup host.
Super-rich Qatar expects next year to run a fiscal shortfall of 4.9 per cent of GDP, the ministry of development planning and statistics said on its website, and 3.7 per cent in 2017.
"The fall in oil prices that began in June 2014 was not anticipated," said Qatar's minister for development planning, Saleh al-Nabit.
"If they persist, lower oil prices will narrow the government's fiscal cushion but our considerable financial reserves will provide an ample buffer," he said.
"Important capital spending plans will proceed." The projected deficit comes as Doha has earmarked spending plans of around US$200 billion on massive infrastructure projects over the next decade.
These include a new metro system, a new port and even a new city north of the capital Doha.
Many of the projects are linked directly or indirectly to the World Cup in seven years.
Qatar's hosting of the 2022 football tournament, long criticised over human rights and alleged corruption, has been coming come under increased scrutiny.
Following the arrest of FIFA officials in Zurich, Swiss judicial authorities have announced an investigation into the awarding of the 2022 World Cups as part of a far-reaching corruption scandal.
Officials overseeing tournament plans, however, say their preparations remain unaffected, despite speculation that Qatar could be stripped of the tournament due to the unfolding scandal at world football's governing body.
The development ministry's statement also revealed that the energy-rich Gulf state's economy will grow by 7.3 per cent in 2015, down from a previous estimate of 7.7 per cent but still above last year's growth rate of just over six per cent.
"Real GDP growth is expected to taper in 2016 and 2017," the ministry said.
Following the publication of the figures, Qatar's stock exchange continued a recent downward trend, closing 106 points down at 11,836.