Qatar will run a deficit of $7.7 billion in 2018, a third consecutive year in the red due to low energy prices, the finance ministry said Tuesday.

The gas-rich emirate projected spending at $55.4 billion and revenues at $47.7 billion, both slightly higher than previously estimated, the ministry said in a statement.

A shortfall of $7.8 billion has been predicted for this year.

The ministry said it calculated oil income for next year at a conservative price of $45 a barrel, unchanged from 2017, despite a sharp rise in crude prices.

In 2016, Qatar posted its first budget deficit of $12 billion after 15 years of surpluses.

The deficit would be financed through the issuance of debt, said the ministry.

Expenditure on major projects was projected at $25 billion next year, almost the same level as in 2017, $3 billion of which would be on World Cup 2022 projects, said the ministry.

Forecasts for 2018 come at a time of crisis for Qatar, which has been diplomatically and economically boycotted by a bloc of Saudi-led countries since June.

Qatar stands accused of supporting Islamist extremists and of being too close to Shiite Iran, Riyadh's arch-rival.

Doha denies the allegations and has accused the Saudi-led bloc of aiming to incite regime change.

"Qatar continues to make great progress in cutting its budget deficit, which can be attributed to lower energy prices and high development expenditure," said Finance Minister Ali Shareef al-Emadi.

"The blockade has, if anything, added impetus to our economic diversification strategy."

Qatar, the world's largest exporter of liquified natural gas and an oil producer, has been forced to tighten its belt following the 2014 collapse in the price of crude.

In recent years Qatar has sought to reduce its reliance on hydrocarbons and its 2030 "National Vision" is to turn Qatar into a "knowledge-based economy".

Source: AFP