Qatar budget surplus driven by favourable energy prices; local banks see optimisation in funding sources

Higher budget surplus in the first three quarters of this financial year denotes favourable oil and gas prices, which clearly helps Qatar to manage its assets and debts quite remarkably.Recent data from the Ministry of Finance showed Qatar’s financial surplus exceeded QR77bn in the first nine months of 2022 compared to QR4.9bn during the period in 2021.Revenues during the first nine months of 2022 reached QR232.6bn, with QR193.9bn coming from oil and gas, and QR38.6bn from non-oil revenues, exceeding the 2021 total revenue of QR193.7bn.Thrice in the last 10 years, Qatar achieved similarly huge surpluses: 2012 (QR77bn), 2013 (QR106.3bn), and 2014 (QR108.6bn)."The 2022 budget surplus is mainly due to the remarkable control over expenditures and the rise in revenues with the recovery seen in oil prices,” the Ministry of Finance said.Qatar’s 2022 budget has been based on a conservative price of $55 per barrel.According to QNB Economics, crude oil prices could see a further upside, as the bank expects physical markets to tighten further on the back of supply constraints and stronger global demand.QNB expects prices to be well supported in a range of between $90 and $115 per barrel over the coming quarters."On the demand side, after several quarters of negative economic growth de-ratings by analysts and international organisations, there is now scope for a more positive outlook. In fact, we expect stronger than previously anticipated economic growth in all major economies over the next couple of quarters, including in the US, Europe and China,” QNB Economics said.In a recent report, researcher FocusEconomics noted Qatar’s public debt will decline over the next four years from 45.5% this year to 38.7% of GDP in 2026.Next year, the country’s public debt has been estimated to be 39.9%, 40.8% in 2024 and 39.7% (2025)."With higher oil and gas prices and improved local liquidity situation, there is less reliance on non-resident deposits and optimisation in funding sources for (local) banks,” an analyst told Gulf Times.FocusEconomics researchers’ see a 4.5% rise in Qatar’s GDP during 2022, which is unchanged from last month’s forecast and 2.7% growth in 2023.GDP growth over the next four years has been forecast at 2.7% (2023), 2.9% (2024), 3.6% (2025) and 4.3% (2026).Also, Qatar is set to record its "fastest” GDP growth in seven years in 2022, FocusEconomics said and noted the gross domestic product will touch $216bn this year.