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United Arab Emirates: Mixed rebound in private sector lending in the GCC countries

ECONOMIC RESEARCH DEPARTMENT  
Mixed rebound in private sector lending in the GCC countries  
Thanks to the upturn in oil prices, the growth of private sector lending has accelerated since mid-2017 in the Gulf  
Cooperation Council (GCC) countries. Oil revenues are a key determinant of economic and banking activity.  
Yet trends are mixed. The strong growth in lending in Qatar is due to the rebound in commercial activity 18 months after  
the embargo began. In Bahrain, the construction sector and households are fuelling lending. In contrast, lending has  
increased very feebly in Kuwait due to the lack of economic opportunities, while Oman has failed to restore its fiscal and  
external accounts. In Saudi Arabia, reforms are straining private sector activity, resulting in a small increase in lending.  
Lastly, in the United Arab Emirates, the real estate sector is hampering the banking business. In the short term, the  
limited risk of higher interest rates should support loan demand.  
y/y, %  
Bahrain  
Kuwait  
2
1
1
0
5
0
5
0
5
Oman  
Qatar  
Saudi Arabia  
United Arab Emirates  
-
2
016  
2017  
2018  
Source: IMF  
economic-research.bnpparibas.com  
Pascal Devaux  
06 March 2019  
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