NBK ECONOMIC REPORT
weakest it’s been in five years.
Lending to nonbank financial companies saw a healthy net gain and maintained positive growth from a year ago. Sector debt added KD 42 million during the month, with growth coming in at 2.7 percent y/y. The sector appears to have largely completed deleveraging that began in the wake of the 2008 financial crisis.
All remaining credit rose by KD 231 million, though growth eased to 7.5 percent y/y on basis effects. A large part of the gain came from a KD 219 million increase in lending for the purchase of securities. Other business sectors were mixed. Some solid gains were visible in the construction, real estate and trade sectors. This was offset, however, by a notable weakness in crude oil & gas and “other”.
Private deposits rose in September, following three months of decline during the summer. Deposits rose by KD 405 million. The gains were concentrated in KD sight and time deposits. Meanwhile, foreign currency deposits declined, partially offsetting the gains. The notable rise in KD sight deposits pushed growth in the narrower M1 money supply higher to 2.3 percent y/y; meanwhile, broad M2 money supply growth slowed slightly to 2.6 percent y/y on base effects.
Government deposits added KD 46 million on the month with growth steady at 27 percent. Government deposits have grown notably over the last twelve months at a time when private sector deposits have been under pressure; they added KD 1.4 billion over