Qatar’s Credit Growth Forecasted to Reach 4% in H2 2024

Qatar, 16 August, 2024 :  Qatar's credit growth is forecasted to rise from 2.8% year-on-year (y-o-y) in 2023 to 4% by the end of 2024, according to Fitch Solutions. The growth is attributed to increased demand across various sectors and slower loan repayments.

Analysts predict that credit growth will reach 5% y-o-y by the end of 2025, driven by lower borrowing costs. However, this growth remains below the past decade’s average of 9.7%, as credit demand is lower compared to the funding needs for large-scale projects from the World Cup.

Current lending activity is bolstered by Qatar's global events, a resilient real estate market, and upcoming projects like the $19.2 billion North Field expansion in 2024. Additionally, easing public sector debt repayments are expected to support credit growth.

The report notes a rise in credit growth from -0.3% in early 2023 to 1.9% in 2024, driven by active lending in the services and real estate sectors. Analysts anticipate that a lower policy rate, expected to decrease by 50 basis points in H2 2024 and 200 basis points in 2025, will further stimulate credit demand.

Asset growth forecasts have been revised down to 5.1% and 6% due to a stronger-than-expected decline in other assets. However, an expansion in bond portfolios and continued investment in foreign currency securities are expected to support growth.

Deposits are anticipated to increase by 6% y-o-y in H1 2024, up from a 1.3% decline in 2023, signaling an upward revision from previous projections.

Source : www.zawya.com