Loans to Qatar’s public sector grew by 11% year-on-year; lending to the private and foreign sectors also grew by 15.7% and 22.7% respectively in March, QNB Economics has said in its latest ‘Qatar Economic Monitor’.
Driven by lending related to investment projects and population growth, it forecasts bank lending to continue growing in Qatar. 
Qatari banking asset growth fell to 11.4% in March from 11.7% in February, the monitor said. Foreign assets grew by 12.3% year-on-year, driven by expansion in credit (22.7%); while domestic assets grew by 11.7%, driven by the growth in domestic credit (13.9%) 
“We expect bank assets to continue growing, driven by lending related to investment projects and population growth,” QNB said.
Bank deposits year-on-year growth rose to 6.5% in March from 6.2% in February, which QNB Economics expect to continue on “strong population growth” in Qatar. 
Qatar’s overnight interbank rates rose to 1.24% on average in March from 1.18% in February 2016, QNB Economics said.  
The 1-week interbank rate rose by 45 basis points to 1.57% in March, the 1-month interbank rate rose by 87 basis points to 2.5% and the 1-year interbank rate fell by 25 basis points to 1.75%. 
Broad money (M2) growth contracted by 0.4% in March after a 2.5% contraction in February, mainly due to a contraction in foreign currency deposits of 13.7%, QNB Economics said. 
On the other hand, demand deposit growth picked up to 8.4% in March from 3.7% in February.
“We expect M2 to rebound as strong population growth is projected to drive an expansion in deposits,” QNB Economics said.
Qatar’s trade surplus fell to $1.7bn in March compared to a month earlier and is down from $4.2bn a year earlier, it said. 
“The year-on-year decline was due to the fall in exports, which decreased by 33% year-on-year on lower oil prices, while imports rose by 4.7% over the same period. We expect the merchandise trade surplus to rise in 2016 as oil prices recover,” QNB said.
Qatar’s fiscal deficit contracted to QR0.7bn in Q3, 2015 compared to the previous quarter (QR1.2bn), it said. 
QNB Economics data also showed that Qatar’s international reserves fell to $36.4bn in March compared with $36.7bn in February.
In months of prospective import cover, international reserves were stable at 6.3 months of imports
“We expect international reserves to stabilise going forward as oil prices recover,” QNB Economics said.
Brent crude oil prices picked up to $48.1 a barrel at the end of April compared to $39.6 a month earlier.
Qatar’s crude oil production increased to 692,000 barrels per day (bpd) in February 2016 from 637,000bpd in January.
“We expect 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,” it said.