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Qatar expects a 16% revenue increase in 2023 budget

City, Metropolis, Urban REUTERS/John Sibley
The budget is based on an oil price of $65 per barrel, compared to the assumption of $55 a barrel for 2022

Qatar approved its 2023 fiscal year budget on Monday with revenue projected to increase 16.3 percent next year, its finance minister said, thanks to lower oil prices.

Total annual income is estimated at QAR 228 billion ($62.64 billion) and spending at QAR 199 billion, with a budget surplus of QAR 29 billion, state news agency QNA quoted minister Ali bin Ahmed Al Kuwari as saying.

The budget is based on an oil price of $65 per barrel, compared to the assumption of $55 a barrel for 2022.

Oil and gas revenue is estimated to increase 20.8 percent over the figure of the budget for 2022 to QAR 186 billion in 2023, while non-oil revenue is expected to be flat at QAR 42 billion.

The finance minister attributed the expected increase in revenue to “a dramatic recovery in global energy prices this year, in addition to the estimates of international companies that energy prices will continue to rise in the medium term”.

The Gulf state, which recently hosted the 2022 soccer World Cup, posted a surplus of 30 billion riyals in the third quarter, benefiting from high global energy prices.

The total budget expenditure in 2023 is almost three percent less than in 2022 as the costs related to the World Cup are completed while the allocations for projects are reduced by 13.6 percent to QAR 63.9 billion.

About 20 percent of the expenditure in 2023 is allocated to the health and education sectors.

GDP growth hit 4.4 percent in the first half of 2022 but is expected to soften in 2023.

“Economic activity should continue to be supported by investment related to the North Field gas expansion and strong growth in logistics, manufacturing and trade,” Standard Chartered said in its economic outlook 2023 report earlier this month. It forecasts GDP growth at four percent in 2023 from 4.7 percent this year.

Qatar, among the world’s top exporters of liquefied natural gas, has also seen rising demand for LNG from Europe since Russia’s invasion of Ukraine in February.