One of the Gulf’s largest and highest-rated borrowers won’t need to return to the debt market any time soon, though it may choose to take advantage of low interest rates.
“The only time we might need financing is just to improve our financial position,” like refinancing outstanding debts more cheaply, said Ali Al Kuwari, Qatar’s acting finance minister and the Minister of Commerce and Industry.
A rise in global energy prices has helped the tiny country generate a first-quarter surplus of QR200 million ($54m) as opposed to the QR54 billion deficit it had anticipated. If the situation continues, investors should expect Qatar to tap bond markets “only to be opportunistic”, he said in an interview at the Qatar Economic Forum that airs in full on Tuesday.
Qatar has issued $34bn worth of government bonds since 2018, more than any other sovereign save Saudi Arabia. It’s spent hundreds of billions of dollars on infrastructure meant to be delivered by the 2022 World Cup, but with construction for the event nearing completion, its budget balance is shifting.
The first-quarter surplus was due to “a mix of controlling expenditures as well as improved revenues”, Al Kuwari said.
Ali Al Kuwari, Qatar’s acting finance minister and the Minister of Commerce and Industry
This budget balance has also pushed off the urgency of introducing a value-added tax, something other Gulf countries have rushed to implement amid shrinking receipts. Al Kuwari said the country hasn’t picked a date to impose the levy and has been wary about adding an extra burden on consumers in the midst of a pandemic. The minister said Qatar would wait for “the right time to go ahead” with the tax.
The Qatar Ministry of Commerce and Industry, Investment Promotion Agency Qatar and Media City Qatar are underwriters of the Qatar Economic Forum, powered by Bloomberg.
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