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Business / Qatar Business

Qatar oil production picks up; fiscal deficit narrows

Published: 18 Sep 2017 - 11:16 am | Last Updated: 01 Nov 2021 - 03:38 pm
Peninsula

By Satish Kanady / The Peninsula

Qatar’s oil production picked up to 611,000 b/d in June from 594,000 b/d in May. Average Brent crude oil prices declined by -0.5 percent month on month in August, reaching $52.4/b, as news of increasing US production outweighed news of falling US crude stockpiles, QNB noted in its monthly monitor yesterday.

Qatar’s broad money supply (M2) grew by 8.3 percent year-on-year in July compared to 7.8 percent in June.

Broad money grew by 0.2 percent month on month in July compared to 2.2 percent in June.

Overnight interbank rates rose to 1.77 percent in June from 1.29 percent in May; the 3-month interbank rate fell to 2.10 percent from 2.25 percent while the 1-year interbank rate stayed flat at 2.50 percent.

The QCB raised its deposit rate by 25 basis points to 1.5 percent after the US Fed hiked rates in March, but kept the lending and repo rates unchanged.

QNB’s Qatar Central Bank (QCB) data reading shows the country’s fiscal deficit has narrowed to -5.1 percent of GDP in Q1 2017 from -17.9 percent in Q4 2016. Revenue rose by 31.0 percent year on year in Q1, helped by higher oil prices, while expenditure rose by 15.8 percent year on year. The 2017 budget announced by the government projects a reduction in the fiscal deficit to QR28.4bn in 2017 from a deficit of QR46.5bn in 2016.

Qatar’s real estate price index contracted by 5.5 percent year on year in June: The real estate price index picked up slightly during Q2, but the index still fell by 5.5 percent year on year in June from a decline of 9.6 percent in March.

The current account balance registered a surplus in Q1 2017 (0.3 percent of GDP) compared to a -1.7 percent deficit in the previous quarter.

The surplus was owing to oil prices which rose higher on a quarter on quarter basis, leading to increased export revenue.

The trade surplus narrowed to $3.3bn in July from $3.4bn in June. Exports grew 11.4 percent year on year to $5.0bn, helped by the recovery in oil and gas prices, while imports fell 35.0 percent year on year in July.

South Korea was the largest export market, with a share of 17.3 percent of total exports, followed by China and Japan; the US and China were the top countries of origin for imports.

Bank deposits growth rose by 12.8 percent year-on-year in July compared to 12.7 percent in June.

Public sector deposit growth accelerated to 37.1 percent compared to 21.4 percent in June. Non-resident deposits slowed to 13.8 percent year-on-year from 26.6 percent growth the previous month.

Private sector deposits declined by -1.1 percent year-on-year compared to 2.4 percent in June.

Bank assets grew 10.9 percent year on year in July to QR1.3tn, compared to growth of 11.6 percent in June. Domestic assets grew 10.3 percent year-on-year in July from 12.4 percent in the previous month. Foreign asset grew 9.5 percent year-on-year in July, from 11.0 percent in the previous month.

Bank credit grew 11.5 percent year-on-year in July, down from 11.9 percent in June.

Loans to the public sector (around 40 percent of total domestic credit) grew 19.0 percent year-on-year versus 19.6 percent growth in the previous month. Private sector loans grew by 5.9 percent year-on-year from 6.4 percent, while foreign credit grew by 10.5 percent from 11.1 percent.