(MENAFN) The ratings agency Moody's said Qatar's real GDP may grow six percent this year, helped by high oil prices, strong liquefied natural gas export volumes and accelerated public spending, Arabian Business reported.
Moody's said that the outlook on Qatar's banking system was stable, as Qatar's high public spending levels is expected to continue to sustain growth and bank lending activity over the 12-18 month outlook period.
The ratings agency said that growth would support banks' asset quality, drive credit growth, likely to be between 20-25 percent during 2012, and increase bank revenues.
It also said that core liquid assets, estimated at 34 percent of total assets in December 2011, demonstrated that liquidity buffers were sound within the system.
Return on average assets stood at 2.7 percent in 2011, one of the highest ratios amongst regional peers, Moody's added.
It added that Qatari banks' interest-rate margins will likely decline in 2012 due to the increased funding costs and the introduction of interest-rate caps on their retail portfolios.
The system's overall profitability is likely to remain at comfortable levels, supported by higher lending volumes, low provisioning requirements and banks' low cost bases, Moody's said.