(MENAFN- The Peninsula) Qatar's crude oil production rose to 642,000 barrels per day (b/d) in May 2015 from 635000 b/d in April. The production is expected to stabilise in the coming months. The Brent crude oil prices is also expected to average $56.2 per barrel, close to its average so far this year, QNB's monthly economic monitor noted yesterday.
According to QNB's research note, Qatar's overall balance of payments recorded a small deficit in Q4, 2014 of $0.5bn. The current account surplus narrowed ($10.5bn in Q4, 2014) on lower hydrocarbon exports; the capital and financial account recorded a deficit of $9.5bn in Q4, 2014 .
"We expect the current account surplus to shrink to $3.7bn in 2015 (4.6 percent of GDP) due to lower oil prices, before recovering slightly in 2016-17 in line with the recovery in oil prices," the analysts said.
Qatar's international reserves rose to $42bn in June 2015 from $41.8bn in May. In months of prospective import cover, international reserves were stable at 7.5 months of imports. QNB expects the accumulation of international reserves to continue, reaching $46bn, or 8 months of import cover at end-2015.
Bank deposits year-on-year growth accelerated to 8.9 percent in June 2015 from 7.7 percent in May. Public sector deposits contracted by 5.9 percent year-on-year in June; private sector deposits grew by 10.1 percent; non-resident deposits doubled, growing by 104.5 percent. "We expect double-digit deposit growth of 11.3 percent in 2015 reflecting strong population growth," it said.
Bank assets growth accelerated to 11.2 percent in June from 7.9 percent in May, driven by strong lending growth. Foreign assets grew by 9.3 percent year-on-year, driven by expansion in credit; while domestic assets grew by 11.4 percent, driven mainly by the growth in domestic credit (11.6 percent). Bank assets are expected to rise by 10 percent in 2015, increasingly driven by project lending.
The overall loan book rose to 13.4 percent year-on-year in June from 11.6 percent in May. Public sector lending contracted by 7 percent year€on-year while lending to the private and foreign sectors grew strongly by 25.7 percent and 31.7 percent respectively. "We forecast bank lending to grow by 9 percent in 2015, increasingly driven by project lending and the expanding population; as a result the loan to deposit ratio is expected to decline gradually to reach 106.5 percent in 2015," the analysts said.
The share of investment in GDP rose to 32.4 percent in 2014 from 28.6 percent in 2013 on rising capital spending from the government; the share of exports declined with lower oil prices. Nominal GDP grew by 4.1 percent in 2014, down from 6.1 percent in 2013, due to lower oil prices.
QNB expects the shares of private consumption and investment to increase on high population growth and strong government investments; lower expected oil prices in 2015 should reduce the share of exports, before bouncing back in 2016.
Qatar's population grew by 10.4 percent year-on-year in July 2015 to reach 2.12 million. Male population rose 11.2 percent year-on-year, reaching 1.7 million in July while the female population increased by 7.6 percent year-on-year over the same period reaching 0.46 million.
QNB expects Qatar's ongoing investment programme to continue to attract expatriates, resulting in overall population growth of 7 percent in 2015.
"We expect inflation to pick up as the growing population is projected to push up domestic inflation, offsetting slower foreign inflation. Inflation rose to 1.4 percent in June (0.9 percent in May)," it said. QNB projects interbank rates to rise with the expected hike in the US policy rates, which is likely to take place later this year.
Citing Qatar Central Bank (QCB) data, QNB said the real estate price index reached its highest point in June 2015 since its introduction four years ago. QNB expects real estate prices to continue their strong growth although at a more moderate pace on strong population growth and higher per capita GDP.
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