12% is Qatar’s Budget Surplus in 2022

Standard & Power's International Agency (S&P) expected Qatar's budget to achieve a fiscal surplus equivalent to 12% of GDP during 2022, following the record growth achieved by financial surpluses in Qatar, as Qatar's budget surplus doubled in the first half of this year by about 12%, reaching a level of 47.3 billion riyals, compared to a surplus of 4 billion riyals during the same period last year, as a result of the remarkable control over expenditures, the rise in revenues and the recovery of oil prices.

The total actual revenues, during the first half of this year, reached a level of 150.7 billion riyals, distributed over 85.7 billion riyals in the second quarter, and 65 billion riyals in the first quarter, including 33.1 non-oil revenues, distributed by 27.5 billion riyals during the second quarter of 2022. And 5.6 billion riyals during the first quarter of this year.

The revenues of the oil and gas sector in the country raised during the first half of this year to 117.6 billion riyals, compared to 70.4 billion riyals in the first half of 2021, which represents an increase of 67%.

The agency suggested that consumer loans will witness record growth this year, with the support of the 2022 World Cup and the high demand for credit, in conjunction with the increase in the total credit provided by Qatari banks to the private sector by 5% during 2022, noting that the large exposure rate of the Qatari banking sector to the public sector supports the quality of the assets of the banking system, while the exposure of QNB and Commercial Bank to the Turkish market will greatly affect the growth rates of their profits, as the two banks have been subject to accounting requirements related to economies with hyperinflation in accordance with international financial reporting standards; As a result, a non-cash accounting adjustment was included in the income statement of the two Qatari banks, which reduced their profitability.

The agency said that the wave of interest hikes will lead to an increase in the profitability of Qatari banks during 2022 thanks to the high net interest margin. The banking and financial services sector actually top the list of the most profitable sectors of the stock market in the first half of this year by 12.92 billion riyals, compared to 12.36 billion riyals in the period Same as last year.

The Qatar Central Bank conducts periodic stress tests on Qatari banks according to three main scenarios: (moderate scenario, medium scenario and severe scenario) with the aim of measuring, monitoring and controlling various risks; To ensure the strength of banking institutions as well as the financial system.

according to the Qatar Central Bank, these tests seek to assess the impact of exceptional events on the financial position of banks and other financial entities. The aim is to reach a comprehensive assessment of risks and to enable each bank to identify weaknesses in its operations, improve the bank’s management of its capital and liquidity, develop contingency plans to deal with various risks, and ensure that the bank’s capital fits in with its risk strategy and structure.