DUBAI, June 22 (Reuters) – Qatar will tap the debt market only on an “opportunistic” basis this year after a surge in energy prices reduced the budget financing needs of the gas-rich Gulf state, the acting minister of finance said.
Ali bin Ahmed Al Kuwari, speaking at an economic forum organised by Bloomberg, said the country would only raise debt this year to take advantage of low rates.
“Only to be opportunistic, but from a deficit and budget perspective, if the situation continues, we should be in a good situation,” he said.
Qatar will likely post a budget surplus this year close to 3% of gross domestic product, ratings agency Fitch said last week, benefiting from a rebound in energy prices after the coronavirus-driven downturn last year which saw the Qatari economy shrink by 3.7%.
A top producer of liquefied natural gas (LNG), Qatar posted a 200 million riyal ($55 million) surplus in the first quarter this year.
The surplus was a result of “controlled expenditure as well as improved revenues,” Kuwari said.
In December, Doha projected a deficit of 34.6 billion riyals ($9.50 billion) this year but its 2021 budget was based on an oil price assumption of $40 per barrel, meaning the actual shortfall could be lower.
Brent crude futures rose above $75 a barrel this week, the strongest since April 25, 2019.
Kuwari said going forward, Qatar will seek to diversify the economy by focusing on attracting foreign direct investment, boosting the private sector, and creating a better business environment.
Gulf Cooperation Council states had agreed to introduce a value-added tax at a 5% rate in 2018 to boost non-oil revenues.
While some countries have since introduced the tax, Kuwari said Qatar was considering it but had no date yet.
Kuwari, who is the minister of commerce and industry, was appointed acting finance minister in May after the arrest of former Finance Minister Ali Sherif al-Emadi over allegations of embezzlement and abuse of power.
($1=3.6416 Qatar riyals)
Reporting by Davide Barbuscia
Editing by Bernadette Baum
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