Qatari banks’ lending to the private sector fell in April and money supply declined for the first time in at least three years as the global economic downturn hurt domestic consumption in the Gulf Arab state.
M2 money supply declined 5.7 percent to 176.89 billion riyals in April compared with a year earlier, the central bank said in a monthly bulletin.
Total domestic credit of commercial banks rose 1 percent in April from March to 209.87 billion riyals, the data showed.
After more than doubling between 2007 and 2008 during a regional economic boom, total domestic credit in Qatar fell in the first two months of the year as the global economic turmoil made an abundance of credit a thing of the past.
Total credit to the private sector declined 0.8 percent in April compared with March, the first month-on-month decline in at least three years, according to Reuters data.
‘It’s a combination of things. In a deteriorating macro-economic picture, there’s a slowdown in companies’ demand for credit and banks’ appetite for giving credit will also go down,’ said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.
One of the sectors where lending had decreased was trade, indicative of a slowdown in economic activity, Gokkent said.
The decline in annual money supply is the first fall in at least three years, according to Reuters data.