DOHA: Qatar’s investments as a share of its gross domestic product (GDP) rose to 39.6 percent in Q2 2015 from 32.4 percent in 2014 on stable government capital spending. The country’s private consumption rose to 20.8 percent of GDP in Q2 2015 from 14.8 percent of GDP in 2014, with imports similarly increasing from 30.5 percent to 36.1 percent of GDP on growing population needs, QNB Group’s monthly report noted.
QNB expects the share of private consumption and investment to increase on high population growth and strong government investments; lower expected oil prices in 2015 should reduce the share of exports.
Qatar’s crude oil production decreased to 683k barrels per day (b/d) in November 2015 from 639k b/d in October. QNB expects oil prices to stabilise as excess supply in the global market is reduced by both higher demand and production cuts among high-cost producers, such as US shale oil producers.
“We expect Qatar’s on-going investment programme to continue to attract expatriates, resulting in overall population growth of 4.1 percent in 2016.The broad money (M2) growth has picked up to 3.4 percent in December on the continued rise in quasi money growth. The rise was mostly attributable to the pickup in growth of quasi money from 3.5 percent in November to 3.9 percent in December, and growth in M1 also rose to 2.1 percent in December from 1.9 percent in November”, QNB analysts said
QNB expects M2 to continue growing as strong population growth is projected to drive the expansion in deposits. Overnight interbank rates were stable at 1.17 percent in November 2015 as compared with 1.21 percent in October. The 1-week interbank rate rose by 17 basis points to 1.36 percent in November, the 1-month interbank rate rose by 20 basis points to 1.45 percent in November and the 1-year interbank rate was stable at 1.9 percent.
The foreign merchandise trade surplus fell to $2.6bn in December 2015 from $3.0bn in November, and is down from $5.8bn a year earlier. The year-on-year decline was mostly due to the fall in exports, which decreased by 36.9 percent year-on-year on lower oil prices and imports also contracted by 1.0 percent over the same period. We expect the merchandise trade surplus to stabilise in line with oil prices.
The current account surplus narrowed to $2.8bn in Q3 2015 on lower hydrocarbon exports; the capital and financial account recorded a deficit of $3.9bn over the same period. We expect the current account surplus to narrow in 2015, before stabilising in 2016-17. International reserves fell to $38.5bn in November 2015 compared with $39.1bn in October. In months of prospective import cover, international reserves were broadly stable at 6.7 months of imports from 6.8 months in October. We expect international reserves to stabilise at around 7.0 months of import cover going forward as oil prices stabilise then recover in 2017.
Bank deposits year-on-year growth fell to 5.8 percent in November 2015 from 6.4 percent in October. Public sector deposits contracted by 9.9 percent, private sector deposits and non-resident deposits grew by 11.9 percent and 50.9 percent respectively. QNB expects deposits to continue growing on strong population growth.
Bank loan growth rose to 19.4 percent year-on-year in November 2015 from 16.5 percent in October. Loans to the public sector grew by 6.8 percent year-on-year, lending to the private and foreign sectors also grew by 23.6 percent and 41.9 percent respectively. QNB forecasts bank lending to continue growing driven by project lending and the expanding population.
