Doha: HH the Emir Sheikh Tamim Bin Hamad Al Thani, has issued Law Number (26) of the year 2015, endorsing the state budget for the 2016 fiscal year, which will be effective from January 1, 2016. The 2016 budget was in accordance with the provisions of Law No. (2), 2015, for the state financial system.
The Minister of Finance, HE Ali Shareef Al Emadi, said in a press release that the 2016 budget builds on the Qatar National Development Strategy 2011-2016, which is currently in its fifth year. He stressed that the budget demonstrates the government's keenness to continue the implementation of its sustainable development program with a clear focus on major projects in health, education and infrastructure, in addition to projects related to the hosting of the World Cup in 2022.
HE Al Emadi explained that the projected revenues for the 2016 fiscal year are QR 156.0bn, compared with QR 225.7bn in the previous fiscal year. The decline in revenues is due to a reduction in the oil price assumption to $48 per barrel, compared with $65 per barrel in the previous fiscal year. This assumption aligns the budget with market expectations of prices in the coming year.
The projected expenditure is QR 202.5bn in 2016, compared with QR 218.4bn in the previous fiscal year, leading to a budgeted deficit of QR 46.5bn, due to the sharp drop in oil and gas prices in global energy markets, which are down by over 50% compared with prevailing prices in 2014.
HE Al Emadi explained that the preparation of the 2106 budget focused on achieving a balance between revenues and expenditure to enhance financial stability and economic growth in the country, taking into consideration that oil and gas production are at stable levels, while the non-oil sector are leading economic growth, at an estimated rate of 9.5% in 2015.
As such, the government has adopted important measures to support growth in the non-oil economy and encourage the private sector in expanding its contribution to economic growth and the overall sustainable development program. This will enhance public revenues from non-oil sectors during the coming period.
H.E. Mr. Al Emadi said that reductions in the expenditure focused on avoiding any negative impact on nationals, and maintaining the quality of services of government institutions. "The current situation provides an opportunity to achieve further efficiency, especially in the operating costs of various government departments, which represent a large stake of the total public expenditure," he said, highlighting the importance of achieving maximum utilization of available financial resources.
45% of total expenditure allocated to leading sectors
Allocations for health, education and infrastructure are QR 90.9bn, representing 45.4% of the total expenditure in the 2016 budget, reflecting the government's continued commitment to these sectors, despite the decline in revenues during the current period.
HE Al Emadi explained that one of the main goals during the preparation of the budget was to ensure the completion and implementation of major projects in key sectors along with projects related to the World Cup in 2022. He added that this policy will maintain robust economic growth in the country.
"The total cost of government projects that are currently underway is QR 261bn, excluding projects in the energy sector or those being implemented by the private sector. This includes QR 87bn in transportation, QR 54bn in other infrastructure, QR 24bn in sports and QR 30bn in Water and Electricity. There are also projects in the education sector totalling QR 17bn in the health sector worth QR 7bn," he added.
Enhancing expenditure on education projects
The state of Qatar is continuing to enhance spending on key sectors, especially education, as funds allocated to the sector have increased to QR 20.4bn. His Excellency the Minister of Finance indicated that these funds aimed to ensure the implementation of the strategic plan for the sector. It includes new expansions in the Qatar Foundation for Education, Science and Community Development and in Qatar University, including a new hostel, students' affairs building and campuses for the faculties of engineering, education, law, medicine and medical sciences, in addition to a laboratory for the Faculty of Sciences.
Other education projects include the establishment of 18 new schools and 6 kindergartens planned during 2016.
Promoting health services
As for health services, HE Al Emadi said that funds allocated to the sector are QR 20.9bn, with the aim of implementing a set of advanced strategic programs to enhance the sector and achieve high standards of health services.
There is a special focus on boosting health projects as funds were allocated for the Sidra Medical and Research Center, along with the completion of Hamad General Hospital and Hamad Medical City. Also, more than QR 850mn are allocated for the establishment of 5 new health centers, in addition to funds for the establishment of the Cancer Treatment Center, Specialised Clinics Center, Biomedical Research Center, and premises for Emergency Medical Services and other health projects.
25% of total expenditure allocated to infrastructure projects
Allocations to infrastructure projects total QR 50.6bn in the 2016 budget, representing 25% of expenditure.
HE Al Emadi said that the infrastructure sector is the key to sustainable development in the country. Funds were allocated to rail projects and the New Doha Port, along with a large number of roads projects including the new Al Rayyan road, the new Al Khor road and the development of the fifth ring road in Doha. He added that the projects included the development of the infrastructure in Doha Industrial Area and the completion of expansions in the water, electricity and sewerage networks in various areas to keep up with the population growth in urban areas.
QR 2bn for housing loans
HE Al Emadi stressed that the 2016 budget will continue to support nationals in all areas and includes funding for housing loans worth QR 2bn through Qatar Development Bank, representing a 25% increase from QR 1.6bn in 2015. He added that there have been around 6,000 beneficiaries of housing loans since 2013.
Land reclamation
HE Al Emadi announced that funds were allocated for the development of a large number of land plots, which includes the establishment of the infrastructure and utilities for around 3,700 land plots in different areas in the country to be distributed to nationals. Construction is underway for the development of a total area of around 4.4m square meters, and it is expected to be finalized during the first quarter of 2017.
Financing the deficit through debt instruments in local and international markets
The 2016 budget plans for a deficit, as a result of the decline in oil and gas revenues after the drop in prices in international markets. HE the Minister of Finance said that Qatar will finance this deficit through issuing debt instruments in the local and international financial markets.
He added that Qatar has accumulated strong financial reserves at Qatar Central Bank (QCB) and has made sizable investments through the Qatar Investment Authority (QIA) during the period of high oil and gas revenues. "The State of Qatar will maintain these reserves and investments. The 2016 budget does not include any income from the reserves at QCB or investments of QIA, as this is being reinvested to boost the country's reserves and investments, in order to further enhace Qatar's financial position," HE Al Emadi said.
QNA
