Qatar 'beating Saudi blockade' as smaller budget deficit is predicted for 2018

Qatar has announced that expects its budget deficit to decline marginally next year as the economy absorbs the aftershock of a Saudi-led boycott.

Finance Minister Ali Shareef al-Emadi made the announcement about the 2018 budget on Tuesday in a statement published by the state-run QNA news agency.

"Qatar continues to achieve a great improvement in decreasing the budget deficit due to low energy prices and high costs of development projects," Emadi said.

"The unjust siege helped in adding a boost to the national strategy to diversify Qatar's economy."

He added that revenues were rising significantly because of the efforts to diversify Doha's economic sources.

The finance ministry said Qatar will run a deficit of $7.65 billion in 2018 - from $7.73 billion this year - because of low energy prices.

The gas-rich emirate projected spending at $55.4 billion and revenues at $47.7 billion, both slightly higher than previously estimated, the ministry said in a statement.

A shortfall of $7.8 billion has been predicted for this year.

The ministry said it calculated oil income for next year at a conservative price of $45 a barrel, unchanged from 2017, despite a sharp rise in crude prices.

In 2016, Qatar posted its first budget deficit of $12 billion after 15 years of surpluses.

The deficit would be financed through the issuance of debt, said the ministry.

Expenditure on major projects was projected at $25 billion next year, almost the same level as in 2017, $3 billion of which would be on World Cup 2022 projects, said the ministry.

Forecasts for 2018 come at a time of crisis for Qatar, which has been diplomatically and economically boycotted by a bloc of Saudi-led countries since June.

Qatar stands accused of supporting "extremists" and of being too close to Iran, Riyadh's arch-rival.

Doha categorially denies the allegations and has accused the Saudi-led bloc of aiming to incite "regime change".

Qatar, the world's largest exporter of liquefied natural gas and an oil producer, has been forced to tighten its belt following the 2014 collapse in the price of crude.

In recent years Qatar has sought to reduce its reliance on hydrocarbons and its 2030 "National Vision" is to turn Qatar into a "knowledge-based economy".