Qatar’s Development Planning & Statistics Ministry has revised its forecast on the state’s expected fiscal deficit from 4.8 per cent to 7.8 per cent of GDP in 2016. It also downgraded its overall economic growth forecast for the year from 4.3 per cent to 3.9 per cent.

The ministry said it expects fiscal deficits to persist until 2018. The deficit is expected to increase to 7.9 per cent of GDP in 2017 before easing to 4.2 per cent in 2018, according to news agency Reuters, citing a report the ministry released on 18 June.

“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,” the report said.

The ministry’s latest growth forecasts are understood to assume that the crude oil price will average $37.88 a barrel in the current year, $45.49 in 2017 and rise to $48.91 the following year.

Lower oil and gas revenues have resulted in lower liquidity among Qatari banks and a rise in money market rates.

The report said that the Central Bank might consider several options to address the liquidity issue among its banks, including cutting official interest rates, continued suspension of domestic treasury bond issuance, and a resumption of treasury bill issues suspension.

It does not rule out the adoption of other “unconventional measures” by the Central Bank, such as direct purchases of commercial bonds and extraordinary loans to, or equity injections in, individual banks.