Qatar Economic Outlook Issue Number 13

Figure 2-26: The monetary base
 
108.1 
0
20
40
60
80
100
120
20.0-
10.0-
-
10.0
20.0
30.0
40.0
50.0
2016
2017
2018
2019
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
(N
ov
)
Year
2020
2021
QR
B
illi
on
%
a
nd
p
oint
s
Banks Balance at QCB
Currency Issued
Monetary Base (%)
Monetary Base (R-axis - QR bln)
Source: QCB and prepared by PSA 

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Qatar Economic Outlook 2021 - 2023 
80 
Domestic Liquidity Pressures 
Credit facilities provided to the private sector 
during 2019 grew by about 16.1%, as shown 
in Figure (2-27), which led to attracting non-
resident deposits that grew at a rate of 23%, 
while residents’ deposits grew by about 
2.4%. Most of the growth in credit facilities 
came from domestic credit, especially for 
those activities related to wholesale or retail 
trade, and service activities such as oil well 
maintenance services, gas distribution, 
handicrafts, legal advice, real estate sales 
and brokerage services, and so on. However, 
in light of the light growth of domestic 
deposits, which constitute about 64% of total 
deposits, the gap between the private 
sector’s total deposits and total credit has 
widened from QR 62 billion in 2017 to QR 93 
billion in 2018, i.e., an increase of 51% 
compared to 2017.
With the continued rise of domestic credit and 
non-resident deposits, against the stability of 
domestic deposits during 2019, led to an 
increase in the gap widening from QR 93 
billion in 2018 to QR 145.5 billion in 2019, 
with a growth rate of 56%. 
Given the decline in economic activities 
during 2020 as a result of Covid-19 
containment measures, the gap on average 
amounted to about QR 148 billion during 
2020, with a maximum of QR 165 billion in 
August 2020, and a minimum of QR 134 
billion in December 2020, and therefore the 
average gap increased by about 2.2% 
compared to December 2019. 
As for the period (January – November of 
2021), the gap on average amounted to 
about QR 132 billion, with a maximum of QR 
153 billion in November 2021, and a 
minimum of QR 104 billion in April 2021, and 
therefore the average gap decreased by 
about 11.7% compared to the average of the 
same period of 2020, as a result of the growth 
of non-resident deposits by an average of 
25.8%, coupled with a decrease in the pace 
of domestic credit growth from double digits 
to single digits, which averaged just 6.3% 
instead of the level it was at in 2020, i.e., 
about 13%. 
Regarding the credit facilities provided to the 
public sector (both government and public 
enterprises) in 2019, the governmental and 
semi-governmental enterprises paid part of 
their indebtedness to the banking system, but 
public enterprises have significantly 
increased their borrowing, growing it by 
14.6% compared to 2018. Owing to the 
government’s use of part of its deposits in the 
banking sector - perhaps to repay loans - the 
total of the public sector's deposits declined 
at a higher rate than the decline in the public 
sector's credit, which led to a further gap 
between them, advancing from QR 26 billion 
in 2018 to reach QR 37 billion in 2019, i.e., a 
growth rate of 40%. 
In 2020, the government continued the 
process of paying back its borrowing dues to