Qatar state spending up 13%, slowest in 11 years

Updated 28 July 2014

Qatar state spending up 13%, slowest in 11 years

DUBAI: Qatar’s state spending increased 12.7 percent last fiscal year, the lowest rate in 11 years, as slow growth in current expenditure offset a sharp rise in funds spent on infrastructure projects, data showed.
Expenditure rose to a record high of 231.7 billion riyals ($63.6 billion) in the year that ended in March, from 205.6 billion riyals in 2012/13, preliminary finance ministry data released by the central bank showed.
Last year’s spending was 10 percent more than initially planned. But the margin by which actual spending overshot the plan was the lowest in five years, suggesting the government has begun reining in excesses of the previous four years, when on average it spent almost a quarter more than originally planned.
Doha also seems to have accelerated work on infrastructure projects worth roughly $210 billion that it plans over the next decade or so, many of them related to Qatar’s hosting of the 2022 soccer World Cup.
Project spending soared 32.7 percent to 68.4 billion riyals last fiscal year, compared with growth of just 1.9 percent in the previous year.
Difficulties in planning and logistics, as well as bureaucratic obstacles, delayed project spending in the past.
Qatar has now scaled down or divided into phases some big-ticket projects, such as a metro, a port and airport facilities, to reduce economic overcapacity risks.
Current expenditure rose 6.0 percent to 163.2 billion riyals in 2013/14, a sharp slowdown from a 24.4 percent jump in each of the previous two years, because of a drop in interest payments and spending on supplies and services. However, public sector wages kept rising strongly.
State revenue in the world’s top liquefied natural gas exporter grew 21.9 percent to a record 346.6 billion riyals last fiscal year, slower than the 27.8 percent rise in the previous year.
Revenue growth would have slowed further if Qatar Petroleum had not started transferring its entire financial surplus to the government from 2013. Previously, a part went to the government as investment income, part was retained on the company’s balance sheet, and part was used to provide fresh capital to the Qatar Investment Authority.
The 2013/14 budget surplus surged to a record 115.0 billion riyals, or 15.6 percent of gross domestic product, from 78.8 billion riyals or 11.4 percent of GDP in the previous year.
Analysts polled by Reuters in April forecast Qatar’s fiscal surplus would total 7.7 percent of GDP in 2014/15, shrinking to 5.2 percent in the coming fiscal year.
Soaring government spending, combined with flat production of LNG, falling crude oil output from mature fields and lower hydrocarbon prices, may push Qatar’s fiscal balance into deficit over the medium term, the International Monetary Fund warned in March.


‘The stock market, stupid’ — Trump’s claim is looking hollow 

Updated 29 October 2020

‘The stock market, stupid’ — Trump’s claim is looking hollow 

  • The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency
  • The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost

Before the US election of 1992, candidate Bill Clinton summed up what he saw as the reason he would become president: “It’s the economy, stupid.” He was proved right as voters disowned the economic policies of President George H.W. Bush in their droves to elect Clinton. 

Until the COVID-19 pandemic began to ravage the US economy in March, President Donald Trump would have been able to make the same claim. For the four years of his presidency, the US economy had continued the progress initiated by his predecessor to recover from the 2009 global financial crisis.

By most measures — growth, employment, inflation — the Trump years had been good, and those on the top of the pile had even more reason to be grateful thanks to the big tax cuts he had made a flagship policy.

The pandemic changed all that in the space of a few weeks as lockdown measures shocked the economy. Jobless claims soared to all-time records, bankruptcies and closures affected large swathes of American business, and gross domestic product collapsed. The International Monetary Fund forecasts that the American economy will shrink by 4.3 percent this year.

But Trump could still claim instead that “it’s the stock market, stupid” as a reason he could be re-elected. Mainly because of the trillions of dollars injected into the economy in the form of fiscal stimulus, US share indices had swum against the economic tide.

The S&P 500 index hit an all-time high in September, allowing Trump to boast that under his administration, investors and the millions of people whose livelihoods depended on the financial industry had never had it so good.

Now, it looks as though even that final claim is looking more fragile. For the past couple of days, US and European stock markets have gone into reverse as investors took fright at the rising number of COVID-19 cases and the re-imposition of economic lockdowns in many countries.

Trump might argue, with a little justification, that Wall Street is worried about the prospect of Joe Biden being elected president by the end of next week. Certainly the contender, by definition, is something of an unknown quantity in terms of economic policy.

He is also known to favor some policies — such as tighter regulation on environmental sectors, more spending on health care, and higher taxes for federal services and projects — that have traditionally been regarded as contrary to the philosophy of “free market” America.

In particular, the energy industry is worried about possible restrictions on shale oil and gas production that Biden and his “green” team are believed to favor. However, it should be pointed out that the Democratic candidate has specifically said he will not ban shale fracking, as some environmentalists want.

In any interesting side-story, the state of Texas — one of the biggest in terms of electoral college votes — would seem to have more to lose than any other if the energy scare stories about Biden were true. Yet the contest there between Democrats and Republicans is the closest it has been for decades, according to opinion polls.

The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency and a sign of his deal-doing prowess. If even this claim is denied to him in the final week of campaigning, it would make the uphill battle against the polls even more difficult.

There is a chance that Big Tech might offer some relief. The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost, given that they were the ones largely responsible for the big market gains earlier in the year.

But for Trump, any such respite might be too little, too late. It looks as though Wall Street and Main Street are finally catching up in their gloom, and there is nothing the president can do about it.