Qatar’s international reserves reach all-time high of $46.5bn

By Pratap John/Chief Business Reporter

Buoyed up by current account surplus, Qatar’s international reserves jumped $6.9bn in a year and reached an all-time high of $46.5bn in end-November, a new report has shown.

The country’s international reserves stood at $39.6bn in November 2013, QNB said in its latest monthly monitor.

“The large increase reflects the strong current account surplus Qatar is enjoying, despite lower international oil prices. The import cover stood at 8.7 months at end- November 2014, well above the IMF-recommended level of three months for pegged exchange rates,” QNB said.

Qatar’s international reserves have been steadily rising over the years on account of the country’s large current account surpluses. Going forward, QNB expects international reserves to rise further in 2015 on continued current account surpluses.

The report shows that Qatar’s oil production fell and prices declined in November on “weaker global demand”.

The stagnant Eurozone economy, the recession in Japan and the slowdown in emerging markets are contributing to the weakness in hydrocarbon demand and a supply glut, which is putting downward pressure on international oil prices.

Qatar’s crude oil production has been on a general decline, but “redevelopment plans should stabilise output”, QNB said.

Qatar Petroleum (QP) is implementing a redevelopment programme to steady production at its oil fields. This heavy investment in existing oil fields such as Bul Hanine, Al Shaheen and Dukhan, should stabilise oil production at about 700,000barrels per day (bpd).

According to QNB, the country’s foreign merchandise trade balance registered a surplus of QR24.9bn in November last year. The surplus decreased 17.9% year-on-year (y-o-y) partly as a result of lower international crude oil prices, which reduced total exports by 10.7%.

At the same time, imports rose strongly, 13.8% year-on-year, reflecting the growing population and large investment spending.

Total exports in November stood at QR35bn and imports at QR10.1bn.

Japan topped the export destination in November, accounting for 22.6% of Qatar’s exports, followed by South Korea (16.8%) and India (13.5%).

The US was the largest exporter to Qatar in November (13.2%), followed by China (9.5%) and Germany (7.8%).

QNB’s monthly monitor shows the country’s non-hydrocarbon sector continues to drive economic growth, pushing its share of GDP to over half (50.7%) in Q3, 2014.

Real GDP growth accelerated to 6% in the year to Q3, 2014, from 5.7% in the previous quarter.

Growth in the non-hydrocarbon sector reached 12% year-on-year in Q3, 2014 (11.9% for the first nine months of 2014).

“This is higher than our forecast of 11.2% for the full year,” QNB said.

On the other hand, the hydrocarbon sector declined 2.8% year-on-year in Q3, 2014 as a result of lower crude oil production and temporary gas production shutdowns for maintenance, the report said.

The report also said Qatar’s overall economic outlook remains strong and the key driver of growth will continue to be the non-hydrocarbon sector, supporting the continued diversification of the economy.

Growth is expected to accelerate further in 2015; QNB said and added the implementation of large infrastructure projects and a large influx of expatriates will continue to drive double-digit growth in the non-hydrocarbon sector.