#Qatar Emir sees first half 2020 deficit at 1.5 billion riyals | Reuters

Qatar Emir sees first half 2020 deficit at 1.5 billion riyals | Reuters

Early indications for Qatar’s first half deficit put the figure at 1.5 billion riyals ($412 million), much better than expectations, Qatar’s Emir said on Tuesday.

The gas-rich Gulf state is expected to see its economy shrink by 4.5% this year, the International Monetary Fund has predicted, amid lower energy prices and the coronavirus crisis.

That would be the smallest contraction among countries in the oil-producing Gulf, according to the Fund.

“Early results show that the budget deficit for the first half of the year is 1.5 billion riyals despite expectations being much higher than that,” Sheikh Tamim bin Hamad Al-Thani said in a speech to the country’s Shura council.

The Emir also said he had instructed that the state budget should be drawn up on the assumption of an oil price of $40 a barrel and “that is less than the expected price”.

Qatar said in December last year it expected to achieve a surplus of 500 million riyals this year, but that was before the pandemic and the ensuing oil price shock. It had based the 2020 budget on an oil price assumption of $55 per barrel.

According to the IMF, Qatar will be the only country in the Gulf to post a budget surplus this year, estimated at 3% of GDP.