Qatar’s crude oil production declined to 643,000 bpd in August compared with 677,000 bpd in July, QNB has said in its ‘Monthly Monitor.’ Brent crude oil prices fell by 1.5% in October to $48.3 per barrel, the bank said yesterday.
“Opec’s inability to agree on production limits has put a damper on oil markets, with investors wary of its upcoming meeting at the end of November,” the report said.
International reserves dipped to $36bn from $36.5bn the previous month. Qatar has maintained an average of $36.5bn in reserves in 2016 so far, the monitor said. In terms of months of import cover, Qatar’s reserves cover 7.1, well over the minimum of three months for a fixed-exchange rate recommended by the International Monetary Fund.
International reserves and months of import cover have largely been steady during 2016, despite the weak macro environment, and should improve going forward, it said.
Qatar’s trade balance, QNB said, “stayed largely flat” in September compared to the previous month, with a surplus of $2.4bn. Both exports and imports fell, month-on-month, at -5.2% and -11.7%, respectively.
Japan is the largest export market, with a share of 17.9% of total exports in Q2-2016, followed by South Korea at 15.7%.
The fiscal deficit widened to QR15.2bn in the second quarter (Q2) from QR13.1bn in Q1, with the pace of spending exceeding that of revenue growth.
Revenues recovered to QR33.2bn, growing at 25.7% year-on-year and 14.3% quarter-on-quarter. Expenditures grew 26.7% year-on-year and 14.9% q-o-q.
“We expect the government to run a budget deficit of around 5.4% of GDP in 2016, down from a surplus of 1.2% in 2015,” QNB said.
September saw a large decline in the Qatar Central Bank real estate price index (REPI) with a contraction of 10.9% on year, the second negative reading of the year. The REPI contracted 5.6% month-on-month. The REPI reflects the prices of land, residential and commercial transactions.
According to QNB, overnight interbank rates increased to 0.98% in September from 0.92% in August; the 3-month interbank rate eased to 1.98% from 2.5% in August; and the 1-year interbank rate stayed flat at 1.8%.
Broad money contracted by 4.7% y-o-y in September due to the contraction in foreign deposits, the report showed.
Broad money continued its constricting trend, with M2 contracting by -4.7% y-o-y in September, from -6% in August. This is largely owing to a contraction of foreign currency deposits, which fell by 18.3% during the month, a slight deceleration from the 20.2% contraction that took place the previous month.
October also saw the Qatar’s population reaching 2.6mn, which was a “record high”. The male and female populations rose by 8.9% y-o-y and 6.3%, respectively. Women make up around 25% of the population.
“We expect Qatar’s on-going investment programme to continue to attract expatriates, resulting in population growth of 7.9% in 2016 and 7.1% in 2017,” QNB said.