The rising oil prices are expected to help Qatar’s finances steadily improve and return to a ‘healthy surplus’ by 2019, according to a report by the Qatar National Bank (QNB).

“Higher hydrocarbon prices and spending restraint will see Qatar’s budget steadily improving,” said QNB, in its ‘Qatar Economic Insight- September.’

Thanks to spending restraints initiated by the government, the country’s fiscal deficit narrowed significantly, from 4.7% of the GDP in 2016 to 1.6% in 2017, reported The Gulf Times.

Data released by Qatar’s Ministry of Finance shows that while the country’s total expenditure slipped by around 2% in 2017 compared to  2016, spending on major projects remained unaffected and actually showed a 2.6% increase.

Qatar’s revenues also grew by 9% last year owing to higher oil prices.

Coming to expenditures, the country’s spending is expected to show modest overall year-on-year growth in 2018.

This is because, in addition to spending restraints, the cost of mega infrastructure projects and those related to the 2022 FIFA World Cup will finally start to flatten out. The surplus should then begin to increase consistently in 2019, leading to debt repayments and an increase of capital in the Qatar Investment Authority (QIA), reported The Peninsula.

The expected introduction of Value Added Tax in 2019 is set to boost revenues by around 1¼% of total GDP. It will help the government to diversify and reduce volatility in its revenues.

“Qatar’s economic performance remains resilient,” QNB said and noted that despite the economic blockade imposed by some of its neighbours, the economy grew by 1.6% in 2017.

Growth in the non-hydrocarbon sector slowed from a buoyant 5.3% to a still-solid 3.8%, proving resilient to the temporary disruption by the economic blockade.

Meanwhile, construction, which accounts for 21% of non-hydrocarbon output, remained Qatar’s key growth driver.

Construction output was up 17.5% in 2017, supported by key infrastructure projects related to Qatar’s Vision 2030 and also the 2022 World Cup.