Qatar Central Bank (QCB) Governor H E Sheikh Abdullah bin Saoud Al Thani said that the state budget achieved a surplus of QR7.1bn in the first half of this year compared to a deficit of QR35.4bn in 2017.
This came in a speech delivered by HE the Governor at the second day of the Euromoney Qatar Conference 2018.
The QCB Governor added that this was achieved despite the unjust siege imposed on Qatar, stressing that thanks to the wise leadership and concerted efforts of all bodies and sectors in the country, the crisis has been overcome and the negative effects of the unjust siege have been addressed. Today, Qatar is stronger than ever, and its economy is stronger than before June 5, 2017, he said.
His Excellency said that the great indicator of that is that the country’s real GDP has witnessed growth in the first half of 2018 estimated at 2.5 per cent compared to 1.6 percent in 2017. Nominal GDP for the same period has also jumped by 14.6 percent, with inflation continuing at a low level of only 1 percent, which was positively reflected in improving internal and external balances.
He pointed out that the current account of the balance of payments witnessed during the same period a surplus of QR25.7bn, or 7.6 percent of GDP, compared to a surplus of QR4.5bn, or 1.5 percent only, during the same period of 2017.
The QCB Governor said Qatar’s international reserves and foreign currency liquidity, which had dropped by 20 percent in the first few months after the siege, have recovered and are now back to normal, and amounted to $46.5bn at the end of September, a level higher than it was before the imposition of the unjust siege when it was $45.7bn at the end of May last year.
He noted that the precautionary measures taken by QCB to enhance the flexibility and development of the financial system, as well as the regulatory and international requirements of the Basel Committee and the Accounting and Auditing Organization for Islamic Financial Institutions, have contributed to the flexibility of the financial sector.
On the other hand, the monetary policy taken by the QCB under the unjust siege led to effective management of this crisis, which reflected positively on the banking and financial sector, the QCB Governor said.
This, he said, is illustrated by some of the following indicators, as the total assets of commercial banks operating in Qatar grew by 5 percent during the first nine months of 2018.
In terms of pooled savings, customer deposits with commercial banks have increased to more than 2.5 percent until September 2018.
In terms of domestic employment, credit facilities extended by commercial banks to their customers have increased by 1.8 percent until September 2018. The capital adequacy ratio of banks operating in Qatar increased to more than 15.5 percent at the end of September 2018.
In addition, the ratio of non-performing loans to total loans and credit facilities stood at 1.7 percent, reflecting the quality of the assets of the commercial banks operating in the country at the end of September 2018.
Net profits/Average Shareholders’ equity amounted to about 11.6 percent at the end of September 2018. The total assets were around 1.2 percent at the end of September 2017, and the liquidity coverage ratio of national banks was about 140 percent at the end of August 2018, and for the total banks operating in Qatar during the same period reached 142 percent in 2017.
Sheikh Abdullah bin Saoud Al Thani noted that during the period of the unjust siege, Qatar Central Bank increased the strength and efficiency of the financial sector in the country, and at the end of last year it launched the second strategic plan for the financial sector 2017-2022, in coordination between Qatar Central Bank, Qatar Stock Exchange and QFC Regulatory Authority.
The strategy is developing a roadmap on strengthening financial sector control and financial market development as well as maintaining integrity and trust in the financial system.
He added that Qatar is currently preparing for the launch of the well-known financial technology strategy (Fintech).
In addition, the State of Qatar is preparing to launch the National Strategy for Inclusion & Financial Education at the State level, and is developing human capital through training and building capabilities in line with the best international standards and practices so that the State of Qatar becomes a leading global hub in the field of services, markets and financial activities to reach the goals of Qatar National Vision 2030.
The QCB Governor explained that Qatar has taken many initiatives and issued laws, legislation and resolutions to develop business environment and investment in order to promote economic growth and expand the role of the private sector in various activities, as the necessary legislation was passed on foreign ownership of real estate, establishment of companies and permanent residency, and as citizens of 80 countries around the world were excluded from entry visa, in addition to the establishment of a free zone to promote intra-trade with various countries of the world.
His Excellency pointed out that the private sector is expected to play a key role in increasing growth rates in the coming years.
He pointed out that the 7th edition of the Euromoney Qatar Conference was an important platform to deal with financial and global economic issues as it gathered decision-makers and experts, stressing that Qatar is keen to host this conference every year.