Qatar, the world’s largest exporter of liquified natural gas, will see its budget surplus shrink in 2020 due to projected higher wage bills, a government statement said Monday.
The Gulf monarchy ran a provisional surplus of 4.4 billion riyals ($1.21 billion) -- its first surplus in three years -- in 2019 due to higher energy prices. That is now expected to shrink to 500 million riyals in 2020.
“Expenditure is estimated at 210.5 billion riyals, up by 1.9 percent compared with 206.6 billion in 2019,” the finance ministry wrote in a statement.
“Budgeted expenditure is the highest in the past five fiscal years, reflecting the country’s commitment to the completion of multiple development projects” ahead of the 2022 World Cup.
A 3.3 percent hike in the government wage bill was down to a hiring spree for newly completed education, health and railway projects, the statement said.
Qatar has been under an economic and diplomatic boycott by neighbouring countries led by Saudi Arabia for the past two and a half years although signs of reconciliation efforts have recently emerged.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with Qatar in June 2017, accusing it of links to extremist groups and being too close to Iran, Riyadh’s regional arch-rival.
Doha has denied the charges and increased business with existing trade partners outside the region, announced plans to produce more gas and sought new markets.
Qatar, the third largest economy in the Gulf, has also sought to secure new revenues to boost income streams that shrank due to the slump in oil prices after mid-2014.
In January 2018, the government announced legislation allowing 100 percent ownership for foreign investors in most economic sectors in a bid to boost non-energy revenues.
Previously, foreign investors could own up to 49 percent of companies listed on Qatar’s stock exchange.