Qatar’s quarterly nominal GDP expanded by 4.1 percent year-on -year to $40.4bn in Q4 2016, while Q3 GDP was revised upwards to $38.8bn from $38.6bn previously. Investment was the biggest contributor to GDP, with 11.8 percent growth year-on- year and an expanded share of 44.9 percent from 41.0 percent a year ago.
According to QNB analysts, the country’s net exports continued to fall on a year on year basis, although at a slowing pace; net exports fell 42.1 percent in Q4 compared to 71.4 percent in Q3; government and private consumption grew by 7.1 percent and 8.1 percent, respectively.
The non-hydrocarbon sector drove real GDP growth in Q4-2016. The real GDP growth slowed to 1.7 percent year on year in Q4 2016 while Q3 real GDP was revised upwards to 3.9 percent from 3.7 percent previously. Growth in the non-hydrocarbon sector picked up to 5.9 percent, while Q3 GDP was revised upwards to 5.3 percent from 4.7 percent. Construction was the fastest growing sector in Q4, with growth at 17.3 percent. The hydrocarbon sector contracted by 2.5 percent in Q4, following an expansion of 2.6 percent in Q3.
Qatar oil production fell to 610000 barrels per day (b/d) in March, from 620000 b/d in February as Qatar continues to comply with Opec production cuts. The country’s broad money supply (M2) expanded for the first time in 12 months, growing 2.5 percent from -0.8 percent in January. This was helped by a smaller than usual contraction in foreign currency deposits which fell by only 0.6 percent in February versus 10.8 percent year on year the previous month.
Overnight interbank rates fell to 1.19 percent February from 1.40 percent in January; the 3-month interbank rate stayed nearly flat at 1.65 percent while the 1-year interbank rate picked up to 2.25 percent from 2.15 percent. The Qatar Central Bank (QCB) hiked its policy lending and deposit rates in March, in line with the US Fed rate hike; the lending rate rose to 5.00 percent from 4.75 percent while the deposit rate rose to 1.25 percent from 1.00 percent. The QCB also reduced the cash reserve ratio to 4.50 percent from 4.75 percent.
The country’s fiscal deficit narrowed sharply to QR5.1bn (3.6 percent of GDP) in Q3 2016 from QR15.2bn (11.3 percent of GDP) in Q2. Revenue declined to QR31.4bn in Q3 from QR33.2bn in Q2, while expenditure fell to QR36.5bn from QR48.3bn.
The trade surplus grew to $3.4bn in February. Exports grew 22.5 percent year on year and 0.8 percent month on month to $5.6bn, helped by the recovery in oil and gas prices; imports fell 15.4 percent year on year and 12.6 percent month on month. Japan was the largest export market, with a share of 19.1 percent of total exports, followed by South Korea and India; China, the US and the UAE were the top three countries of origin for imports.
International reserves were steady at $34.2bn in February. The reserves stood at $34.2bn compared to $34.1bn in January. The current level of reserves is equivalent to 6.6 months of import cover, which is well above the IMF recommended minimum of three months for a fixed-exchange rate regime.
The balance of payments (BoP) deficit narrowed to near balance in Q3 2016. The BoP deficit narrowed for the third consecutive quarter, reaching a deficit of $0.1bn in Q3 2016 from a deficit of $0.3bn in Q2 2016. The improvement in the BoP was driven by a fall in the current account deficit to $1.5bn from $2.5bn;
