Qatar’s budget for fiscal year 2012-13 tells a great about the country’s direction, namely racing against time to attain its potentials. Suffice to say that projected expenditures and revenues are up by 27 per cent and 26 per cent respectively compared to originally budgeted figures for 2011-12.

Like Kuwait, fiscal year in Qatar starts in April and ends in March though for no apparent significance other than historical practices. Surprisingly, Qatari authorities delayed release of the budget for the new fiscal year for several weeks without providing sufficient justification. Undoubtedly, the only undermines the country’s record of being ahead of regional countries in releasing state-controlled reports.

At any rate, the budget puts expenditures at a record $48.9 billion as opposed to $38.5 billion in fiscal year 2011-12, undoubtedly an exceptional rise in spending in a single year.

In reality, a sizable portion of higher spending relates to allocating additional funds to public sector salaries, up by a robust 48 per cent to more than $10 billion. It is fair to assume that a great number of Qatari nationals, who make up minority of the population in their own country, would end up spending a significant amount of extra revenues, hence the threat of hikes in prices.

Needless to say, stronger expenditures rekindle fears of inflationary pressures reminiscent to those prevailing in 2007. At the time, prior to emergence of the global financial crisis, Qatar stood out amongst fellow Gulf Cooperation Council (GCC) countries for suffering from a double-digit inflation rate.

Another negative aspect of the budget concerns fact concerns the extraordinary role played by the state in the economy, as direct public sector spending comprises a quarter of the country’s GDP. Still, real public sector’s share of total spending shoots up by adding spending of firms wholly or partially owned by the state.

In fact, state-owned enterprises own stakes in numerous areas in the country including telecom, hospitality, property and off course the petroleum sector. In other words, the state’s involvement in the economy is exceptionally high.

On a positive note, substantial public sector spending helps convincing private sector investors to follow suit. Understandably, local investors derive comfort from steady rise of public sector spending, seen as a sign of commitment.

Revenues are put at $56.6 billion thereby leaving behind a projected surplus of $7.7 billion. This is a notable amount by virtue of comprising nearly 4 per cent of the country’s GDP. The norm is for counties to project deficits rather than surpluses when preparing the budget, but ostensibly not when it comes to Qatar.

Yet, actual revenues should be higher than projected due to differences between assumed and actual oil prices. The authorities prepared the budget with a notably conservative figure of $65 per dollar at a time when the average oil is projected to remain above the level of $100 per barrel. Global economic recovery together with geo-political tensions including sanctions on Iranian oil and troubles elsewhere serve to maintain relatively high prices.

Arguably, the notably-low rate assumed for average oil helps checking the significance of the petroleum sector in the local economy. Thus, relatively low oil prices and thereby projected revenues tend to suggest a lower than real reliance on the petroleum sector, and therefore a more diversified economy.

Thanks to steady economic growth rates for several years in a row, Qatar has overtaken Kuwait as the third largest economy within the six-nation GCC after Saudi Arabia and the UAE. Latest available statistics put the value of Qatar’s GDP at $197 billion versus that of $181 billion for Kuwait.