Qatar achieved record fiscal revenue, expenditure, and surplus in 2011/12 and is forecast to do so again in 2012/13. Revenue grew 42% to QR220 billion in 2011/12 due to high oil prices, with hydrocarbon revenue accounting for 81% of the total. The fiscal surplus increased to QR54 billion or 8.6% of GDP. For 2012/13, QNB Group forecasts revenue to increase 10% to QR243 billion and the surplus to reach a new record high of QR58 billion, double the budgeted level.

1. QNB Economics
economics@qnb.com.qa
24 August 2012
Qatar forecast to achieve another record fiscal surplus
Revised figures for Qatar’s fiscal outturn in 2011/12 from oil, those from gas, and a dividend drawn from
show that revenue, expenditure and surplus all reached Qatar Petroleum (QP).
record levels. QNB Group expects to see a similar
pattern in 2012/13, when the surplus is forecast to rise The dividend from QP is drawn from the state-owned
to QR58bn. company’s profits and was QR26bn last year, but has
been as high as QR54bn in 2009/10. These profits
The revised figures from the Ministry of Economy and include whatever is left over from its oil and gas
Finance were published in Qatar Central Bank’s recent production after the payment of royalties on sales
Quarterly Bulletin. These substantially updated the (12.5% for gas and 20% for oil), taxes on its profits
initial official fiscal estimates for the fiscal year that (50% for gas and 85% for oil), the revenue shares of
ended in March. private operating partners and operating costs. Also
included are profits from QP’s downstream operations,
The updated figures show that revenue grew by 42% such as its 51% stake in Industries Qatar.
to QR220bn (US$60bn), surging ahead of the previous
record set in 2009/10. Expenditure was also at a record Combining the QP dividend with oil and gas taxes and
level of QR166bn, up 16% on 2010/11. As a result royalties shows that in 2011/12, at least 81% of
there was a fiscal surplus of QR54bn, or 8.6% of GDP, revenue was related to the hydrocarbons value chain.
higher than the 7.1% given in the initial estimates and
well above the 2.8% recorded in 2010/11. Significantly, the “other revenue” line of the budget,
which includes all the non-hydrocarbon sources of
Qatar Fiscal Outturn and Budget revenue, surged by 78% in 2011/12. The largest part of
(QR bn) this revenue comes from corporate taxation which
Other revenue Capital expenditure dipped in 2010/11, following the reduction in the tax
Hydrocarbons revenue Surplus rate on foreign companies to 10%, but it has more than
243 doubled in the latest year as corporate profits have
Current expenditure
220
206 47 expanded. The 2012/13 budget forecasts a further
169 41 sizable increase in this area and expects further
156 63
141 33 corporate profit growth to boost the tax revenue to
23
28 QR54bn.
179 196
136 132 144 On the expenditure side, the sharpest annual increase
113 54 54 58
41 in 2011/12 was in interest payments, up 72% because
28
13
government debt had increased by 54% during the
-67 -76 2010/11 fiscal year. However, at just QR9.6bn, interest
-98 -116 -116 -124 payments only comprised 6% of expenditure. Salaries
-33
-39 and wages also registered a sizable increase, by 28%,
-100 -44 largely as a result of pay increases for nationals
-115 -50 -62 -60
-143 introduced in September 2011.
-166
-179 -184
Overall current expenditure rose by 17% and was 41%
2008/9 2009/10 2010/11 2011/12 2012/13f 2012/13f above budget, a larger overspend than usual, while
budget QNB
capital expenditure rose by 13% but was 14% below
Source: Ministry of Economy and Finance and QNB Group budget.
forecasts
The 2012/13 budget expects revenue of QR206bn,
The core of Qatar’s fiscal revenue naturally comes which would be slightly down on last year, based on a
from oil and gas. This rose by 35% to QR179bn in conservative oil price of US$65/barrel. The oil price
2011/12 as oil prices averaged US$113/barrel. It is has already averaged $106 in the first four months of
comprised of three components: royalties and taxes the fiscal year, and so hydrocarbon revenue should be
1

2. QNB Economics
economics@qnb.com.qa
comfortably above budget. QNB Group forecasts a
10% rise in revenue to QR243bn.
The budget set aside QR116bn for current expenditure,
almost the same as in 2011/12, whereas QNB Group
expects this to rise slightly to QR124bn. The capital
budget is set at QR62bn, a 24% rise on the 2011/12
outturn. This is close to QNB Group’s forecast, as the
imperative to get major infrastructure projects
underway should ensure that the allocated budget is
almost fully utilized.
Overall, QNB Group expect a surplus of QR58bn in
2012/13, which would be twice the level that is
budgeted (QR28bn) and set a new record in absolute
terms.
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