Doha - Exclusive

His Highness Sheikh Tamim bin Hamad Al Thani, Emir of the State of Qatar, approved on Tuesday the state's general budget for fiscal year 2026, with total expected revenues of QAR 199 billion ($54.6 billion) and expenditures of QAR 220.8 billion ($60.6 billion), resulting in an expected deficit of QAR 21.8 billion ($5.99 billion). Minister of Finance Ali bin Ahmed Al Kuwari explained that revenue estimates were based on an average oil price of $55 per barrel, reflecting the state's conservative approach to ensuring fiscal sustainability, down from $60 in the 2025 budget. The expected revenues represent only 1% growth compared to the 2025 budget, while expenditures increased 5%, with the deficit to be covered through domestic and foreign debt instruments according to financing needs and debt market developments.

The approval of the 2026 budget comes as the State of Qatar's general budget recorded an actual cumulative deficit of QAR 2.761 billion ($757 million) during the first three quarters of 2025, ending a series of fiscal surpluses that lasted more than three years. The recorded deficit was distributed across QAR 529 million in the first quarter, QAR 800 million in the second quarter, and QAR 1.432 billion in the third quarter, according to Ministry of Finance data, with all these deficits covered through debt instruments, including international bond issuances worth $4 billion in November that attracted strong demand from global investors. The actual deficit recorded through September represents approximately 21% of the expected annual deficit of QAR 13.2 billion for the full year 2025.

The 2026 budget focuses on economic diversification and sustainable development in preparation for a new phase of growth, with economic reports expecting a progressive surplus of 1.1% of GDP supported by major expansion in liquefied natural gas production from 77 million tons currently to 126 million tons in 2026, then 142 million tons by decade's end, which will raise gas revenues to 28% of GDP. Doha allocated significant amounts in the 2026 budget for health and education sectors, continuing its commitment to human capital development and supporting strategic sectors, while actual 2025 performance showed expenditure increases of 5.7% in the second quarter driven by higher spending on major capital projects totaling QAR 17.5 billion, in addition to increased current expenditures and salaries.

The International Monetary Fund confirmed in its February 2025 assessment that the Qatari economy is moving past the post-World Cup slowdown, expecting approximately 2% growth in 2024-2025 jumping to 4.75% once the planned expansion of liquefied natural gas production begins, while local forecasts indicate economic growth may reach 5% in 2026 and 7.9% in 2027. The Fund noted that both the current account and budget will maintain positive balances as gas export volumes rise, despite current technical deficits resulting from conservative fiscal policy relying on oil price estimates below actual market prices, while the banking sector remains sound with capital equal to one-fifth of risk-weighted assets and problem loans below 4%.