Qatar Reports Q1 Deficit of 10.3 Billion Riyals, Impact of LNG Export Disruptions

Qatar's fiscal balance for the first quarter of 2023 recorded a deficit of 10.3 billion riyals. The conflict between the United States and Iran has led to disruptions in liquefied natural gas (LNG) exports, revealing the vulnerabilities of the energy-dependent Gulf economy. The Qatari Ministry of Finance stated that total revenues for the first quarter were 37.8 billion riyals, a decrease of 23.5% compared to the same period last year. Total expenditures were 48.1 billion riyals, down 3.7%, but the larger decline in revenues resulted in a deficit. QatarEnergy reported that 17% of its LNG export capacity was halted due to damage in Ras Laffan on March 19, with annual revenue losses estimated at around $20 billion. Recovery is expected to take 3 to 5 years. Qatar's finances and foreign currency income are heavily reliant on LNG, and facility damage could escalate costs in finance, trade, shipping, and insurance. S&P Global Ratings projected that Qatar's real GDP would decrease by 5% by 2026. According to a Reuters survey, Qatar's economy could shrink by 8.1% this year. The instability of navigation in the Strait of Hormuz directly impacts Qatar's LNG exports. Qatar plays both the victim and mediator role, condemning the attacks in the Strait of Hormuz and calling for unconditional resumption of operations.

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