Qatar’s capex to average QR55bn per annum over next five years: Moody’s

Qatar’s capex to average QR55bn per annum over next five years: Moody’s

Qatar is expected to spend QR55bn per annum for the next five years, even as its planned infrastructure projects have been completed, according to Moody's, an international credit rating agency.

Assuming that capital spending averages around QR55bn per year over the next five years, Moody's expects that total government spending could decline to around 20% of GDP (gross domestic product) by 2027 from an average of 30% of GDP during 2017-21, it said.

Expects the capital spending to be reduced over the next 5-10 years; it nevertheless said the reduction in spending and the ramp up in liquefied natural gas (LNG) have the potential to offset revenue impact on declining energy prices over the longer term.

"Significant spending reduction and higher hydrocarbon output over the next five years would make government finances more resilient to potential future declines in oil prices and, in Moody's view, has the potential to fully offset the negative fiscal impact of moderating energy prices toward the end of the decade," it said.

Although oil prices are expected to remain volatile and eventually decline to around $50-$70 per barrel in the medium term, Moody's view that the geopolitical risk premium related to the military conflict in Ukraine will keep