Qatar reported a second-quarter budget deficit of 21.2 billion riyals, or approximately $5.8 billion. This figure represents the largest quarterly shortfall for the country since late 2016 and is nearly double the Q1 deficit of 10.3 billion riyals.
The cumulative deficit for the first half of 2026 reached 31.5 billion riyals, exceeding the government's full-year budget projection of 21.8 billion riyals. Total revenues for Q2 were 25.6 billion riyals, while expenditures remained between 46.8 billion and 46.9 billion riyals.
The financial strain stems from a decline in LNG exports following the disruption of shipping through the Strait of Hormuz due to the US-Iran conflict in February 2026. Quarterly LNG exports dropped from 20 million tons to less than 2 million tons, a decline exceeding 90%.
Energy exports account for roughly 80% of Qatar's government revenue. Economists now forecast an economic contraction of 5% to over 8% for 2026. In September 2026, Fitch Ratings removed Qatar from its negative watch status, citing lower risks to production facilities.
Unlike neighbors such as Saudi Arabia and the UAE, Qatar lacks alternative export routes bypassing the Strait of Hormuz. The country historically manages shortfalls through sovereign debt and its sovereign wealth fund, managed by the Qatar Investment Authority.
