Qatar's government expects to run a budget deficit for at least three years as low natural gas and oil prices weigh on its revenues, said the Ministry of Development Planning and Statistics.
In a long-term report on the Qatari economy, the ministry forecast a fiscal deficit of 7.8% of GDP this year, which would be the first deficit in 15 years and bigger than the deficit of 4.8% predicted for 2016 in the ministry's last report published in December. The deficit is expected to total 7.9% of GDP next year before shrinking to 4.2% in 2018, said the ministry. The ministry said the central bank might take several steps to reduce pressure on liquidity in the Qatari banking system. It could cut official interest rates, continue to suspend domestic Treasury bond issuance while resuming its suspension of Treasury bill issues, or adopt unconventional measures used by central banks in other countries such as direct purchases of commercial bonds and extraordinary loans to, or equity injections in, individual banks, said the ministry without specifying which steps were likely to be chosen.