Oil prices come to Qatar's rescue
Recent rise in oil prices could mean Qatar have budget surplus in 2009
By Tom Arnold
A recent rally in oil prices should provide a boost to Qatar’s fiscal position as oil receipts make up over half the country’s hydrocarbon revenues, according to a Standard Chartered research note released on Wednesday.
With the recent upswing in crude prices, the Gulf state’s revenue from the commodity could be sufficient to avoid the country slipping into the budget deficit of US$1.6 billion forecast by Qatar’s government for the fiscal year 2009 to 2010, the bank said.
The government made the forecast for the fiscal year starting in April based on an assumption of average oil prices of $40 per barrel.
But oil prices had consistently exceeded the $50 mark since the beginning of the fiscal year and were expected to average $70 per barrel by the fourth quarter of 2009, according to Standard Chartered.
It follows comments from Qatar Deputy Prime Minister and Minister of Energy and Industry, Abdullah bin Hamad Al Attiyah, on Tuesday that the country’s budget balance would move from a projected deficit into a surplus if oil prices remained above $60 per barrel.
Despite efforts to diversify economies in the GCC, oil was still the single largest economic driver in the region, Standard Chartered said.
The shift higher in oil prices over recent weeks would accelerate recovery in the region’s economies which were already benefiting from an improvement in consumer sentiment, it added.