Qatar may run a budget gap of 4.9 percent of its GDP in 2016 due to the impact of falling global oil prices, according to data released by the ministry of development planning and statistics on Wednesday. The budget deficit is expected to be 3.7 percent of GDP in 2017.
"The fall in oil prices that began in June 2014 was not anticipated," Saleh Al-Nabit, the Development Planning and Statistics Minister, said. "If they persist, lower oil prices will narrow the government's fiscal cushion but our considerable financial reserves will provide an ample buffer. Important capital spending plans will proceed." he added.
The energy-rich Gulf state’s economy is still expected to grow by 7.3 percent in 2016, down on the previous estimate of 7.7 percent, but above the GDP growth in 2014 of barely over six percent, according to ministry data.
The government also said it would continue with its extensive investment program ahead of hosting the football World Cup in 2022, despite the expected budget shortfall. Qatar is forecast to spend about $200 billion on infrastructure projects ahead of the World Cup, including a new metro system, a new port, and even a new city north of the capital Doha.
The country's hosting of the 2022 tournament has been a subject of controversy, with Qatar coming under more scrutiny in the past few weeks due to claims of human rights violations and corruption.
Swiss judicial authorities have announced an investigation into the awarding of the 2022 World Cup as part of a larger corruption scandal, after the arrest of FIFA officials in Zurich at the end of May. Officials supervising the plans for the tournament have stated that the preparations remain unaffected.