20/03/2018 05:44 AST
Driven by an 8.1 percent growth in Oil & Gas sector, Qatar’s GDP grew by 3.9 percent in September 2017 on quarter-on-quarter basis. The non-oil sector grew by 1.9 percent on Q-o-Q, as the private sector advanced by 2.5 percent, KAMCO’s GCC economic quarterly report noted.
As per Qatar National Strategy for 2018-22, the government expects to run the small fiscal surpluses during the period and forecasts a GDP growth of between 2.1 percent and 3.0 percent reportedly with investment into the private sector to be higher to compensate the slower growth in the Oil & Gas economy. Total credit facilities continued the uptrend and stood at a record high level at the end of Q4-17, with an increase of 1.8 percent
Q-o-Q to reach QR911bn as of December 2017, the KAMCO analysts noted.
The growth was ascribed to both the public sector and the private sector, which grew Q-o-Q in Q4-17, as the public sector grew by 3.9 percent, while the private sector credit went up by 1.6 percent as against the previous quarter. Within the private sector, large sectors utilizing credit - real estate and consumption, recorded mixed trends in lending.
Qatar’s real estate credit increased by 4.5 percent Q-o-Q in Q4-17, and grew by 13.2 percent Y-o-Y, while consumption credit declined by 0.1 percent on a quarterly basis, but went up by 2.9 percent y-o -y as compared to Q3-17. Qatar’s broad measure of money supply (M2) went up on a Q-o-Q basis, to gain around QR 38.5bn or 6.8 percent in Q4-17 and stand at around QR603bn as of December17. The jump in M2 is mainly attributed to the increase in deposits in foreign currencies, which went up by QR33.6bn, growing by 18 percent on a quarterly basis in Q4- 17. Quarterly inflation inched up marginally during Q4-17 Q-o-Q by 0.5 percent, ascribed to a 2.6 percent increase in Transport costs as compared to Q3-17.
Housing & related utilities prices declined by 0.8 percent, while Food & Beverage prices went down by 0.5 percent Q-o-Q. Most other components improved marginally on a Q-o-Q basis.
According to KAMCO, GCC budget gaps are expected to further narrow in 2018 and a single-digit deficit ise expected by 2020.
Budgets deficits for the GCC region in 2018 are forecasted to come in at $51bn, a 52 percent reduction from 2017 budget deficits ($107bn), based on KAMCO’s analysis of IMF’s general government fiscal balance estimates. Expense optimization and reduction initiatives are key drivers for the lower budget gaps.
Nevertheless, KAMCO forecasts budget deficits to come in lower, as higher revenues are expected if oil prices were to stay at levels seen in Q1-18 (above $60/bbl) for the rest of 2018. Current account balances in the GCC over 2017-2019 are estimated to move into surplus, albeit marginally, and is expected to average 0.3 percent of GDP over the period.
The Peninsula
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