Qatar Banks Record Higher Credit Issuance in June, Reflecting Positive Outlook on Economy

Total domestic credit issued by local banks reached QR1.33tn in June, up 5.2% on the same period last year, according to the Qatar Central Bank.

An increase in total domestic credit for banks generally means that the banks are lending more money to businesses, individuals, and the government sector within Qatar.

“Higher demand for credit signifies a positive outlook on the Qatari economy and rising consumer confidence,” according to an analyst.

“Increased lending often signifies that businesses and individuals are borrowing to invest in projects, expansion, or consumption, which can stimulate economic growth. It also indicates that consumers and businesses are confident about the future, hence willing to take on more debt,” he noted.

Bank credit has become attractive for both businesses and individuals with rates remaining stable and expected to fall further this year.

In its latest banking sector indicators, the QCB noted that total domestic deposit increased by 1.9% (on the same period in 2024) to reach QR850.5bn in June.

Higher level of deposits obviously strengthens the banking sector, as banks have more reserves to cover withdrawals and invest in opportunities.

With more deposits, banks have more money to lend, which automatically boosts economic activities such as business expansion, consumer spending, and infrastructure projects.

“More deposits indicate public confidence in the financial system, which is essential for the smooth functioning of the economy,” the analyst said.

QCB data reveal broad money supply (M2) increased by 1.1% to QR740.3bn in June. This represents an increase of 1.1% on the same period last year.

M2 includes cash, checking deposits, and easily convertible near money like savings deposits, money market securities, and other time deposits.

An increased money supply has seen stimulating economic activity by making more funds available for businesses and consumers to borrow and spend, which then boosts overall economic growth.

With more money in circulation, there may be more investment in various sectors, leading to potential economic expansion and development.

Total assets of commercial banks in the country increased by 6.3% year-on-year to reach QR2.13tn in June, the QCB said.

Higher assets indicate that banks are growing and managing more resources, which enhance their stability and reliability.

More assets allow banks to extend more loans to businesses and consumers, fuelling economic growth through investments and consumption, analysts say.

It clearly suggests that both domestic and foreign investors have confidence in Qatar’s financial system, leading to increased capital inflows.