Rise in economic activity in the country has led to increase in credit offtake from banks. The total domestic credit by banks in Qatar has risen by QR5.53bn to reach QR1.03 trillion in September this year, according to Qatar Central Bank (QCB) data.
Demand for loans from services and real estate sector has played a crucial role in banks’ credit expansion.
Banks credit to the service sector increased from QR186.95bn in September this year from QR184.99bn in August 2020, showing a monthly increase of QR1.96bn. The credit to real estate sector increased from QR153.8bn in September to QR152.7bn in August, registering monthly growth of QR1.2bn.
With fall in COVID-19 cases government has gradually eased restrictions imposed on commercial activities to limit the spread of coronavirus. Encouraged by lifting of restrictions and fall in coronavirus cases, private sector has increased its operations. Many companies have also intensified hiring process to meet growing demand in the country.
“Increase in bank loans is directly proportional to acceleration of commercial activities. With the consistent decline in COVID-19 cases, we have seen sharp rise in queries in new loans from private firms in the past three months. The queries are mainly coming from real estate, transport and construction sector,” a senior official of a private sector bank told The Peninsula. “We have also seen an increase in demand from commercial transport companies. With the easing of restrictions, mobility of people has increased which in turn has increased the demand for taxis and other commercial vehicles,” he added.
The momentum in the real estate sector has increased. In the last two quarters, the deal size in the real estate sector has nearly doubled, showing revival in the sector. During April-June quarter of this year, deals worth QR5.4bn were signed, according to the Planning and Statistics Authority. While, during July-September quarter, deals worth QR10.1bn were signed, signaling confidence among real estate investors and buyers.
Total credit by banks in Qatar, which include credit by banks outside Qatar, reached QR1.11 trillion at the end of September this year, according to QCB data.
Many indicators have shown a sign of recovery in the country’s economy. The October Purchasing Managers’ Index (PMI) survey data, released last week, has confirmed a sustained rebound in business conditions of Qatar’s non-energy private sector economy.
