Qatar’s international reserves were broadly stable at $40.1bn in September compared with $40.9bn in August, QNB has said in its latest ‘Monthly Monitor’.
“In months of prospective import cover, international reserves fell to seven months of imports from 7.2 months in August. We expect international reserves to recover to eight months of import cover going forward as oil prices stabilise then recover in 2017,” QNB said.
Brent crude oil prices remained low in October; averaging $49.4 a barrel compared with $48.6 in September.
Qatar’s crude oil production increased to 643,000 barrels per day (bpd) in August from 613,000 bpd in July.
“We expect Qatar’s crude oil production to stabilise; we also forecast that Brent crude oil price will average around $55 a barrel in 2015-16, before picking up to $60 in 2017 when investment cutbacks are expected to erode the supply glut in oil markets,” QNB said.
According to QNB, the foreign merchandise trade surplus contracted to $3.3bn in September compared with $6.9bn a year earlier. The year-on-year decline was mostly due to the fall in exports, which decreased by 39.5% year-on-year on lower oil prices; imports decreased by 7.9% over the same period mainly on lower aircraft imports and global commodity prices.
“We expect the merchandise trade surplus to shrink to $57.9bn in 2015 from $100.6bn in 2014 on lower oil prices,” QNB said.
The monthly monitor shows that Qatar’s overall balance of payments recorded a small surplus of $2.4bn in Q2, 2015, leading to an increase in international reserves.
The current account surplus narrowed to $4.7bn (11.1% of GDP) in the second quarter on lower hydrocarbon exports; the capital and financial account recorded a deficit of $2.4bn in Q2.
“We expect the current account surplus to shrink to 6.2% of GDP in 2015, before stabilising in 2016-17,” QNB said.
Qatar’s broad money (M2) growth fell to 5.7% in September from 6.2% in August, QNB said.
“The fall was mainly due to the slowdown in the growth of quasi money from 7.2% in August to 5.6% in September, while growth in M1 rose to 5.8% in September from 3% in August. We expect M2 growth to pick up, reaching 9% by the year-end of 2015 as strong population growth is projected to drive deposit growth,” QNB said.
QNB expects Qatar’s on-going investment programme to continue to attract expatriates, resulting in overall population growth of 9% this year.
Qatar’s population grew by 8.8% year-on-year in October to reach 2.41mn, driven by the large ramp up in infrastructure spending.
The male population rose by 9.5% year-on-year, reaching 1.81mn in October while the female population increased by 6.8% year-on-year over the same period, reaching 0.6mn, it said.