Qatar's swift policy response in containing the Covid-19 spread not only mitigates the health and economic fallout but also helps sustain economic confidence and dampen the impact of the shocks on businesses and households, the International Monetary Fund (IMF) said on Sunday.
An IMF team, led by Mercedes Vera-Martin, held virtual meetings from December 6-14, 2020, to discuss recent economic and financial developments and outlook.
"The (Qatari) authorities’ policy response has mitigated the economic impact of the shocks," the IMF said after its Article IV consultation with Qatar.
The policy response was centred on a QR75bn package to support the economy. A key part of the package, the Qatar Central Bank’s (QCB) zero-percent repo facility (QR50bn) facilitated ample liquidity in the banking system which, together with the QCB’s lowering of its policy rates, has supported credit to the private sector.
A credit guarantee scheme — totalling QR5bn and administered by Qatar Development Bank — has provided direct support to small and medium enterprises (SMEs) and protected jobs.
The households and businesses were allowed to defer loan repayments until the end of the year and benefited from a waiver of rental and utility fees.
"These measures, along with others to ensure salary payments and/or basic allowances to workers and to reduce custom tariffs on critical supplies (all totalling QR2.1bn), helped sustain economic confidence, dampen the impact of the shocks on businesses and households, and sustain the healthcare response, " it said.
The authorities’ swift response – with strict prevention and containment measures and one of the highest per-capita testing rates in the world – allowed the country to resume all economic activities since September.
Quoting the latest financial soundness indicators, the IMF said Qatar's banking sector remains well-capitalised and liquid.
While the moratorium on loan repayments provides an opportunity for banks and businesses to adjust to the new environment, the continued proactive monitoring of credit portfolio risks will support banks’ role in the economic recovery, it added.
"We welcome the continued co-operation across financial sector regulators to strengthen the regulatory and supervisory frameworks," according to the IMF.
"The (Qatari) authorities’ policy response has mitigated the economic impact of the shocks," the IMF said after its Article IV consultation with Qatar.
The policy response was centred on a QR75bn package to support the economy. A key part of the package, the Qatar Central Bank’s (QCB) zero-percent repo facility (QR50bn) facilitated ample liquidity in the banking system which, together with the QCB’s lowering of its policy rates, has supported credit to the private sector.
A credit guarantee scheme — totalling QR5bn and administered by Qatar Development Bank — has provided direct support to small and medium enterprises (SMEs) and protected jobs.
The households and businesses were allowed to defer loan repayments until the end of the year and benefited from a waiver of rental and utility fees.
"These measures, along with others to ensure salary payments and/or basic allowances to workers and to reduce custom tariffs on critical supplies (all totalling QR2.1bn), helped sustain economic confidence, dampen the impact of the shocks on businesses and households, and sustain the healthcare response, " it said.
The authorities’ swift response – with strict prevention and containment measures and one of the highest per-capita testing rates in the world – allowed the country to resume all economic activities since September.
Quoting the latest financial soundness indicators, the IMF said Qatar's banking sector remains well-capitalised and liquid.
While the moratorium on loan repayments provides an opportunity for banks and businesses to adjust to the new environment, the continued proactive monitoring of credit portfolio risks will support banks’ role in the economic recovery, it added.
"We welcome the continued co-operation across financial sector regulators to strengthen the regulatory and supervisory frameworks," according to the IMF.