Doha unveils big spending hike

07 April 2006

Finance Minister Yousef Hussain Kamal on 4 April announced the 2006/07 state budget, projecting a massive 44.4 per cent increase in expenditure to QR 54,600 million ($15,000 million). With revenues expected to soar by 49.6 per cent, the surplus is budgeted to widen to QR 2,300 million ($632 million), from the budgeted QR 217 million ($60 million) in 2005/06 (see table). The fiscal year runs from 1 April to 31 March.

In common with other recent budgets, public services and infrastructure projects receive the lion's share of the increased spending. The 2006/07 allocation rises by 56.5 per cent to QR 10,500 million ($2,885 million). Overall, expenditure on major public projects is set to expand by 70.5 per cent to QR 20,000 million ($5,495 million), with education and social services also significant beneficiaries.

The sharp rise in budgeted revenue is primarily explained by a 33.3 per cent increase in the assumed oil price to $36 a barrel, from $27 a barrel in 2005/06. However, with prices widely expected to remain above $50 a barrel throughout the year, this still remains conservative and another surplus considerably above the government's projection is expected. Preliminary estimates for the surplus in the 2005/06 financial year indicate a windfall of some QR 18,000 million ($4,945 million).

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