Qatar predicts budget deficit of $1.6bn
RIYAL DEFICIT: Qatar is predicting a shortfall of 5.8 riyals in its 2009-2010 budget. (Getty Images)
Qatar is predicting a deficit in its budget for 2009-2010 - its first since 2001 - due to the falling oil price.
The Gulf state insisted, however, it was forging ahead with huge investment in infrastructure development projects in line with its 2030 vision.
The budget is based on an oil price of $40 per barrel and the deficit has been estimated at QR5.8bn ($1.6bn).
Revenues estimated are QR88.7bn, down from QR103.3bn in the previous financial year when crude rates reached record highs of $147 a barrel.
Spending has been estimated at QR94.5bn, leaving a deficit of QR5.8bn.
At least QR37.9bn has been allocated for strategic infrastructure projects in some key areas like health, education and human resource development.
Qatar News Agency (QNA), giving details of the new budgetary estimates, quoted the Minister of Economy and Finance, Yousuf Hussein Kamal as saying the tempo of social, economic and human resource development and the focus on environmental upgrade will be maintained in the new state budget.
http://www.arabianbusiness.com/551470-qatar-predicts-budget-deficit-of-16bn
PaulCowan is right.
In a recession, it's counter productive to tighten belts so much that there is no cash flow to float the economy. It's crucial for the State to spend, and it's also important for the people to spend. What goes around, comes around. We won't see the effect immediately but things will ease in time.
Just need to stay afloat in the interim and ride out the storm. Pessimistic outlooks will be detrimental in the long run. Every person, company, organization or State's actions will have further far reaching effects.
"State spending is the thing that insulates Qatar from much of the fallout of the global slump."
Personal spending is also that which helps insulate our surroundings from the fallout of the global slump. It's prudent to be careful about spending but not to be absolutely tight fisted, thinking that one is saving oneself but it affects other people around that person and ultimately, comes right around to affect that person itself. Even a little goes some way. Like a tiny ripple at the far edge of a pond - reaches and affects the entire pond. Just can't see it or feel its effects immediately.
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Don't want no drama,
No, no drama, no, no, no, no drama
The spending figures mean something, the deficit figures are meaningless because whatever happens the price of oil won't be $40 a barrel - it might average $30 and give a huge deficit or it might average $50 and create a huge surplus (as has happened repeatedly in recent years) or it might be anything at all, really. The $40 is just a best-guess assumption, and historically the assumptions have usually (and no doubt deliberately) been very much on the conservative side.
It is very important for State spending to stay up throughout this slump in order to ensure there is a strong flow of money in the country. If Qatar started to pull back from its "vision" programme it would undermine the economy and probably trigger a downward spiral of job losses, project delays etc. (and if you see these already, imagine how much worse it could get). State spending is the thing that insulates Qatar from much of the fallout of the global slump.
That's assuming they spend the budget in full (100%). This thing did never happen
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What has deficit in the budget have to do with "RIYAL DEFICIT", QAR is tied to the USD, and go up and down with it