Inflation Rate in Qatar Is Expected To Decrease in 2024: Minister of Finance

Doha, Qatar: Minister of Finance H E Ali bin Ahmed Al Kuwari unveiled expectations that the inflation rate in Qatar is expected to decrease during the next fiscal year compared to the current fiscal year based on data from the general budget of the State of Qatar for the year 2024.

In a press conference on Thursday, His Excellency said that the inflation witnessed in Qatar in 2023 was temporary and associated with a specific period and reasons, such as a surge in food prices. He added that inflation rates are returning to their average levels, which rank as the best in the region and globally.

Minister Al Kuwari outlined that next year’s budget will adopt a conservative approach in estimating oil and gas revenues, in line with international best practices, and to achieve a strong financial plan suited to withstand fluctuations in energy markets. As a result, an average oil price of $60 per barrel has been set, compared to $65 in 2023. This will lead to an 11.4 percent decrease in the anticipated revenue generation for 2024, with the total amounting to QR202bn.

He confirmed that the 2024 budget will focus on driving forward the third National Development Strategy (NDS3) objectives of enhancing non-oil sectors, where goals were set for the potential growth of this sector by 2030.

Speaking on securing Qatar’s economic sustainability, he praised a 4.3 percent growth in the industrial sector in the first half of the current year, and the success of the tourism sector in offsetting the slight decline in construction - in which Qatar achieved a record number of 3.54 million visitors from the beginning of the year until last November. He also emphasized the impact of the country’s rigorous financial practices on its credit rating, which is recognized as among the best in the region and globally.

In addition, Minister Al Kuwari underscored the significance of taxes in diversifying the country’s revenues and managing its economy during crises, noting that while current conditions do not favor the imposition of new taxes, taxes on harmful products, such as sweetened and carbonated drinks, aim to safeguard public health. 

Driving forward Qatar’s commitment to enhancing strategic partnerships between the public and private sectors, Minister of Finance affirmed that the 2024 budget will provide various opportunities to include private sector entities in national projects, including the development of government schools, and the Al Wakrah and Al Wukair wastewater project.

Moreover, Minister Al Kuwari said that to further increase private sector contributions to the NDS3, plans for collaboration opportunities are being prepared along with the Ministry of Commerce. He went on to praise the localization programs for prioritizing Qatari companies, products, content and citizens.

He explained that spending on salaries and wages will see an increase of QR1.5bn, with the total budget amounting to a total of QR64bn, which reflects the rise of employment rates in Qatar.

Minister of Finance also announced the allocation of QR500m towards enhancing national employment opportunities and empowering human capital within the job market, pointing out that around 3,000 Qataris were employed during the period from January to September of this year.

For the second consecutive year, and in line with Qatar’s continued dedication to developing health and education, allocations for the two sectors have increased, with both amounting to 20 percent of the total new budget.

As for health sector spending, 11 percent of the budget has been set, with a large portion dedicated to developing the National Cancer Hospital, establishing a psychiatric hospital specializing in mental health, renovating and redeveloping structures within the Medical City, including the Hamad Medical Corporation hospital buildings, as well as establishing healthcare centers in Umm Ghuwailina and Khalifa City.

Meanwhile, 9 percent of the budget will be used for education sector projects, including the modification and expansion of 16 existing schools to further enhance their infrastructure and academic facilities and increasing the allocations for education vouchers for students with disabilities all with the aim of facilitating a greater learning environment and accommodating to the evolving needs of students and teachers alike. 

Additionally, Qatar has allocated resources to construct dedicated buildings for the Faculties of Medicine and Science at Qatar University.

As a result of Qatar’s commitment to repaying external debt and the growth of its Gross Domestic Product (GDP) at current prices, Qatar’s public debt shrank from 58.4 percent of GDP in 2021 to approximately 42.5 percent in 2022 and is expected to continue to fall to 39.4 percent in 2023, and 37.4 percent in 2024. Speaking at the press conference, Minister of Finance said that the decline in external public debt has directly contributed to the improvement of the country’s credit rating.

Addressing Qatar’s credit standing, he pointed to stellar ratings from various international companies; including FitchRating, which upgraded its outlook from stable to positive in 2023, Moody’s, which reaffirmed its positive outlook, and Standard & Poor’s, which provided an “AA” rating.

Minister of Finance noted that these positive ratings solidify the country’s financial stability and demonstrate the strength and resilience of the local economy, both of which have contributed to increased foreign investments.

The 2024 budget is structured around four pillars: allocating resources for the third National Development Strategy (NDS3), raising spending efficiency, setting targets within the medium-term budget, allocating resources to meet Qatar’s spending needs in order to adhere to financing plans, and supporting efforts to diversify the economy, including by enhancing public-private partnerships.