Qatar, one of the largest and highest-rated borrowers in the Gulf, may opt to take advantage of low-interest rates but may not need to return to the debt market in the near future. In an interview at the Qatar Economic Forum, which was fully broadcast on Tuesday, Ali Al-Kuwari, Qatar's Acting Minister of Finance and Minister of Commerce and Industry, stated, "The only time we may need financing is to improve our financial position," such as refinancing due debts at a lower cost.
The rise in global energy prices has helped the small nation achieve a surplus of 200 million Qatari riyals ($54 million) in the first quarter, compared to an expected deficit of 54 billion riyals. Al-Kuwari noted that if the situation continues, investors can expect Qatar to enter the bond markets "to seize opportunities only."
Since 2018, Qatar has issued government bonds worth $34 billion, which is more than any other country except Saudi Arabia. It has also spent hundreds of billions of dollars on infrastructure scheduled for completion by the 2022 World Cup; however, the balance of its budget is changing as the completion of the event's related constructions approaches. Al-Kuwari attributed the first-quarter surplus to "a mix of expense control and improved revenues."
This budget balance has also diminished the urgent need to implement value-added tax (VAT), which other Gulf countries hurried to impose amid shrinking revenues. According to Al-Kuwari, Qatar has not yet specified a timeline for the tax's implementation, as it is cautious about adding a new burden on consumers during the pandemic, stating that his country will wait for "the right time to proceed" with its application.
The Qatar Economic Forum is organized by the Ministry of Commerce and Industry in Qatar, the Qatar Investment Promotion Agency, and the Qatar Media City in collaboration with Bloomberg.
