Qatar Economic Outlook Issue Number 13

 
Figure 2-23: Contribution of non-oil activities to 
the real rate of change
 
-2
-1
-1
0
1
1
2
Industry
Construction
Trade
Transporation
Banking
Real estate
Government
Others
2021 Q3
2021 Q2
2021 Q1
2020
Source: Planning and Statistics Authority

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Part 2 - Economic Performance 2017 - 2020 
 
 
77 
Stability of the Public Finance 
Due to the fact that most of the world's 
governments had to contend with the 
burdens of facing the repercussions from 
pandemic containment measures, among the 
most prominent features of the impact of the 
Covid-19 pandemic on the economies of 
countries were (1) the decrease in public 
revenues resulting from the decline in 
economic activities and thus led to the 
decline of national financial revenues from 
taxes and property income; (2) on public 
expenditures, both current and capital, which 
witnessed either a rise in public spending via 
the provision of financial incentives, or by 
controlling or rationalizing government 
expenditures for some of the government 
services, while covering any deficits accrued 
by increasing domestic and external 
borrowing. According to the estimates
28
of 
the International Monetary Fund, the financial 
incentives and support for the affected 
sectors amounted to about US$ 16 trillion.
The State of Qatar, in common with other 
countries, had its public revenues affected by 
the decline in oil and gas prices, 
compounded by the postponement of tax 
payments. It also provided an incentive 
financial support of QR 75 billion, which was 
distributed to back a lending mechanism for 
commercial banks, as mentioned previously, 
by about QR 50 billion, while also directing 
government funds to increase their 
investments in the stock market with QR 10 
billion, and authorizing the QDB to implement 
the Covid-19 National Response Guarantees 
Program at a level of about QR 5 billion. The 
total support was financed through controlling 
expenditures as shown in Figure (2-24). The 
process of expenditure control was gradually 
implemented according to the revenue 
28
https://blogs.imf.org/2021/07/20/seizing-the-opportunity-for-a-
pro-growth-post-pandemic-world/
stream in Q1 of 2020, through (1) reducing 
capital expenditures and then stabilizing 
them during the remainder of the year, (2) 
continuing to reduce current expenditures, of 
which salary and wages expenses constitute 
one of its items by (a) reducing some 
financial privileges and allowances for Qatari 
employees, and (b) reducing salaries by a 
percentage and canceling travel allowances 
for non-Qatari nationals. However, it is 
remarkable that as soon as global oil and gas 
prices rose since the beginning of Q4 of 
2020, public revenues witnessed a tangible 
improvement that enabled the Ministry of 
Finance to pay the dues of employees who 
were laid off when reaching retirement age or 
for being surplus workers, which therefore led 
to an increase in the expenditures on wages 
and salaries in 2020. As for the budget 
implementation data for the first three 
quarters of 2021, it shows a growth in public 
revenues by 8% and public expenditure by 
1.0%.