Qatar’s budget surplus more than tripled to QR44.5bn ($12.2bn) in the fiscal year ended in March, double the original plan and helped by booming revenues from liquefied natural gas, a prospectus for the country’s potential Islamic bond issue showed yesterday. Qatar is the world’s top exporter of liquefied natural gas and its fiscal surplus for 2011/12 was equivalent to 7% of 2011 gross domestic product, according to a Reuters calculation, up from the original QR22.5bn plan. That puts the government in a comfortable position as it plans to spend more than 10% of GDP on average on infrastructure in the run-up to hosting the soccer World Cup tournament in 2022. In the previous fiscal year Qatar posted a surplus of QR12.8bn, or 2.8% of GDP. The Opec member’s expenditure surged 11% to a record QR158.9bn last fiscal year according to preliminary data, the prospectus said, well above QR139.9bn planned. “Due to a significant wage and pension increase ... for Qatari government employees, government expenditure for salaries and wages is expected to significantly increase for future budgets,” the prospectus said. In September last year, Qatar raised basic salaries and social benefits for state civilian employees by 60%, while military staff received 50-120% increases. Spending on government wages and salaries rose more than 9% to QR25.2bn in 2011/12, the prospectus showed. Qatar held a road show in Kuala Lumpur yesterday and one will be held in Singapore today, following which a sukuk may be issued, subject to market conditions. The country did not give a reason for the sukuk issue. Recently, the government tapped international markets to refinance current debt and obtain low-cost financing for its infrastructure programme and other purposes, the prospectus said. Qatar plans to boost spending further by over 12% to QR178.6bn in the fiscal year that began in April, including on wages, services and infrastructure, but expects to see a still comfortable surplus of QR27.8bn. Revenue soared by nearly 31% to an all-time high of QR203.4bn in 2011/12, thanks to a jump in gas royalties and taxes as well as the business and corporate income tax, the prospectus showed. The original revenue plan was QR162.5bn based on a conservative oil price estimate of $55 per barrel. Oil and gas-related revenue accounts for roughly 81% of Qatar’s overall budget income. Dual-tranche Islamic bond planned Qatar is planning to issue a two-tranche Islamic bond, or sukuk, four sources familiar with discussions said yesterday, as it kicked-off investor meetings in Malaysia. No indication of size was made available, which is usually determined depending on investor feedback and appetite. But market sources in the Gulf said demand for a sukuk from Qatar, one of the highest-rated regional credits as well as one of the world’s wealthiest nations, would be high, allowing the state to print a large deal. Its last debt markets outing was a $5bn multi-tranche conventional bond in November, which attracted orders of about $10bn. Qatar has hired HSBC Holdings, Deutsche Bank, Standard Chartered and local lenders Barwa Bank and QInvest to arrange the investor meetings. The sukuk is scheduled be this week’s business, according to the initial mandate announcement. Global credit rating agency Standard & Poor’s has assigned “AA” issue credit rating to the proposed sukuk.