Qatar's government expects to run a budget deficit for at least three years as low natural gas and oil prices weigh on its revenues, the Ministry of Development Planning and Statistics said.
In a long-term report on the Qatari economy, the ministry forecast a fiscal deficit of 7.8 per cent of gross domestic product (GDP) this year, which would be the first deficit in 15 years and bigger than the deficit of 4.8 per cent predicted for 2016 in the Ministry's last report published in December.
The deficit is expected to total 7.9 per cent of GDP next year before shrinking to 4.2 per cent in 2018, the ministry said.
Qatar, the world's biggest liquefied natural gas exporter, is one of the richest of the Gulf states but like its neighbours, it has been pushed into austerity measures this year in an effort to stabilise its finances. More austerity will be needed to achieve the Ministry's projections, the report said.
"This estimate assumes that the government pares recurrent spending and caps growth of capital spending below previously programmed levels; that there are effective cost reductions in the hydrocarbon sector, which support transfers to the budget; and additional non-oil and gas revenues accrue to the budget."
Some of the projected improvement in the fiscal balance depends on a hoped-for rise in energy prices; the Ministry assumed the average crude oil price would climb to $48.91 a barrel in 2018 from $45.49 in 2017 and $37.88 this year.
The Ministry predicted Qatar's economy would grow 3.9 per cent this year, down from a previous 4.3 per cent forecast. It expects...