Qatar Export Revenues Hit Three-Year High Despite Continued Embargo

Rising oil prices have enabled Qatar to record a quarterly budget surplus for the first time since 2015 despite the regional embargo. The risk is that Qatar’s improving finances reduce the pressure to implement much-needed economic diversification.

Qatar’s economy is out of the red for the first time since oil prices collapsed, despite an embargo by its neighbors now in its second year. Latest data from the Central Bank (QCB) shows a Q1 surplus of $260mn, Qatar’s first such surplus since 4Q 2015.

Were this performance to be maintained over the course of 2018, this would be the first year since 2015 for Qatar to achieve a budget surplus. QCB figures show that the cumulative deficit over 2015-17 was $53.9bn.

The risk is that as rising oil prices bolster Qatar’s economy the imperative for reform lessens. Especially as the government is loath to introduce potentially unpopular measures given the ongoing tensions with Saudi Arabia and the UAE. The planned introduction of VAT, originally intended as part of a GCC-wide rollout, falls firmly into this category.


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