Qatar budget deficit nears $3bn as revenue drops 24%

Qatar reported a fiscal deficit of QAR10.3 billion ($2.8 billion) in the first quarter of 2026, the finance ministry said on Monday.

Total revenue declined 24 percent year on year to QAR38 billion, as total expenditure fell nearly 4 percent to QAR48 billion, the finance ministry said in a post on X.

Government tenders and auctions reached QAR9 billion, with contracts awarded to foreign companies totalling QAR2.3 billion, up 53 percent year on year.

The top four sectors were health, culture and sports, municipality and environment and energy.

In December, Qatar forecast a budget deficit of QAR22 billion for 2026, expecting the gap to be covered through local and external debt.

The total 2026 expenditure was estimated at QAR221 billion, while total revenue was projected to be almost flat at QAR199 billion, based on an oil price of $55 per barrel.

Oil prices hit a high of $120 per barrel in March following the start of the US-Israel and Iran war in February.

Brent crude futures were down around 4.8 percent at $98.70 a barrel on Monday, while US West Texas Intermediate fetched $91.94 a barrel, losing 4.7 percent. Both benchmarks reached their lowest since May 7.

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The decline in revenue is tied directly to damage resulting from an Iranian attack on Ras Laffan Industrial City, the world’s largest liquefied natural gas (LNG) export hub. A March report by Rystad Energy said the site could take up to five years to recover fully after Iranian strikes destroyed two LNG trains.

Damage to key infrastructure, combined with the effective closure of the Strait of Hormuz, has severely constrained Qatar’s ability to ship cargoes to its global customers.

Hydrocarbons accounted for about 63 percent of Qatar’s exports in 2025, or QAR263 billion, according to Azad Zangana, head of GCC macroeconomic analysis at Oxford Economics, underlining the scale of the shock.

“So long as Hormuz remains blocked, Qatar will be running both a trade and fiscal deficit,” Justin Alexander, director of US-based consultancy Khalij Economics, told AGBI in April.