States across the world’s biggest oil-exporting region are expecting to record fiscal deficits this year after oil prices slumped from a peak of almost $ 150 a barrel last July to just over $ 50 now.
“We expect a slight deficit, one that is acceptable in light of the current economic crisis,” Mohammed Ajaj Al-Kubaisi, rapporteur of the financial and economic committee of Qatar’s Advisory Council told Reuters.
Qatar’s fiscal year begins on April 1. As the global financial crisis brings an end to a regional economic boom, most Gulf states, including top oil exporter Saudi Arabia, have pledged to keep public spending high to carry their economies through the downturn.
During a multi-year oil price rally that began in 2002, Qatar and its neighbours had adopted a conservative forecast for revenue from oil, their biggest source of income.
Last year, Qatar, the world’s biggest exporter of liquefied natural gas (LNG), based its oil revenue on a price of $ 55 per barrel and said it expected a $ 2 billion surplus by generating more revenue from oil sales on higher prices. Qatar’s next budget still requires the approval of Qatar’s Emir before it takes effect, Kubaisi said
