Money Supply M1

The over-the-year growth rate of the narrow money M1 in the GCC region increased to 1.4 percent in March 2017, up from 0.7 percent in the year to February 2017. Kuwait recorded the highest growth rate in March of 6.7 percent and flowed by the UAE, Bahrain and KSA: 2.9, 1.6 and 1.0 percent respectively. Qatar and Oman recorded negative growth of -1.7 and -5.5 percent respectively.

Money Supply M2

The GCC aggregate growth rate of broad money M2 increased to 3.5 percent in March 2017, up from 3.2 percent in February. On a month-on-month basis, there was increase of 1.5 percent in March up from a slight increase in February of 0.6 percent. All countries recorded positive over-the-year growth in March 2017.

Money Supply M3

The over-the-year growth rate of the broad monetary aggregate M3 in the GCC region increased to 2.3 percent in March 2017 decreasing by 0.7 percentage points from 3.0 percent in February[1]. The UAE and Qatar recorded the highest growth of 6.7 and 3.0 percent respectively, followed by Bahrain 1.6 percent, Kuwait 0.7 percent and the KSA 0.0 percent.

Monetary Base

The GCC aggregate Monetary Base (or Reserve Money) increased over-the-year by 1.6 percent in March 2017, up from 1.0 percent in February. Four countries recorded positive over-the-year growth: 15.1 percent in Qatar, 8.3 percent in Bahrain, 6.7 in the UAE, and 1.5 percent in the KSA. Oman and Kuwait recorded negative growth of -30.9 and -13.3 percent respectively.

Over-the year growth in the GCC of Money Supply Aggregates

 

On average in the 12 month period from April 2016 to March 2017, the M2 has increased by 0.9 percent, while the M1 in the same period has declined sharply by 1.2 percent. This was due to significant increase in quasi monetary deposits (saving and time deposits) that are included in M2, but not M1.  The 12 month average growth of M3 (excluding Oman) was 0.4 percent due to a decrease in other quasi monetary deposits (mainly government deposits).

 

Growth Rates in Money Supply in GCC Countries, March 2017

		Monthly Growth Rate			Annual Growth Rate
		Jan-17	Feb-17	Mar-17	Jan-17	Feb-17	Mar-17
Money Supply M1	UAE	1.2	1.9	3.2	1.4	3.1	2.9
	Bahrain	2.9	1.2	1.8	0.0	-0.6	1.6
	KSA	0.5	-0.8	2.2	-0.2	-0.8	1.0
	Oman	-0.3	0.8	2.6	-6.8	-3.8	-5.5
	Qatar	-1.0	7.4	-1.2	-7.2	0.4	-1.7
	Kuwait	-0.3	0.8	5.2	4.7	5.0	6.7
	GCC	0.4	1.1	2.3	-0.5	0.7	1.4
Money Supply M2	UAE	0.4	1.1	2.3	3.0	4.2	4.4
	Bahrain	1.3	0.7	0.8	1.4	1.6	1.6
	KSA	-1.0	-0.6	1.3	3.0	3.1	4.0
	Oman	1.1	1.5	1.2	2.6	3.9	3.1
	Qatar	0.7	3.3	0.2	-0.8	2.5	2.4
	Kuwait	-0.8	0.7	2.7	3.4	1.9	0.7
	GCC	-0.3	0.6	1.5	2.5	3.2	3.5
Money Supply M3	UAE	0.3	1.9	1.6	4.8	6.7	6.7
	Bahrain	1.4	0.5	0.8	1.9	1.1	1.6
	KSA	-1.0	-0.9	1.4	0.3	0.1	0.0
	Oman	…	…	…	…	…	…
	Qatar	1.4	5.7	-3.3	-0.6	7.8	3.0
	Kuwait	-0.8	0.7	2.7	3.4	1.9	0.7
	GCC	-0.3	0.9	1.0	1.7	3.0	2.3
Monetary Base	UAE	-3.8	3.3	4.5	3.0	3.1	6.7
	Bahrain	0.2	6.0	4.9	-7.1	-8.5	8.3
	KSA	-0.3	-1.2	1.6	2.7	0.3	1.5
	Oman	-6.3	-4.8	1.9	-27.0	-31.2	-30.9
	Qatar	12.9	-1.8	-0.8	28.7	23.5	15.1
	Kuwait	-3.1	-2.0	8.9	-1.9	-11.2	-13.3
	GCC	-0.1	-0.3	2.8	3.8	1.0	1.6
… Not available

 

 

 

Methodological Note

 

Monetary Aggregates

 

Monetary Aggregates measure the amount of money circulating in an economy, and include Currency in Circulation, Monetary Base or Reserve Money and money supply measures M1, M2, and M3. In some countries, currency in circulation is termed as M0, while M1 is often termed narrow money, and M2 is sometimes referred to as "Intermediate" money (for example by the European Central Bank (ECB)).

Money Supply M1

 

Money Supply M1 or Narrow Money (M1) includes Currency outside banks and sight deposits in national currency held by domestic non-banks comprising the most liquid financial assets. All GCC countries include them in their broad-money aggregates. In Bahrain, sight deposits held by domestic non-banks include deposits both in national currency and foreign currency.

Money Supply M2

 

Money Supply M2 or Broad Money M2 comprises narrow money (M1) and quasi-monetary deposits.

Money Supply M3

 

Money Supply M3 or Broad Money M3 includes M2 plus Other Quasi-Monetary Deposits (government and other deposits).

Broadest Money Supply Aggregates

The components of the money supply aggregates are based on national definitions. In five GCC countries the broadest money aggregate published is M3, while is Oman is M2, as it does not publish M3.

Monetary Base (MB)

                                           

The monetary base comprises central bank liabilities that support the expansion of broad money and credit. The monetary base (reserve money) is defined as the sum of currency in circulation and reserve balances consisting of commercial banks’ cash in vault and deposits with the central bank. The Monetary Base is compiled and published in all GCC Countries, except Bahrain. However, Bahrain publishes the main components of the monetary base, allowing for its calculation.

 

 

 

 

Further information and statistics are available from the GCC-Stat website: http://dp.gccstat.org/en/DataAnalysis?GUknfLvpXEOfZcHhoXnpxw

Media note:
•When reporting GCC-Stat data, the Statistical Center for the Cooperation Council of the Arab Countries of the Gulf (or GCC-Stat)  must be attributed as the source.
•Technical notes are attached.

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GCC-Stat is grateful to the six central banks and monetary authorities of the GCC countries for their cooperation in the compilation of these statistics.

For more details on the Monetary and Financial Statistics of the Gulf Cooperation Council Countries, see Monetary and Financial Statistics of the Gulf Cooperation Council for the Arab States, Volume 1, April 2016, accessible at

(http://gccstat.org/en/elibrary/publications/gccstat?task=callelement&format=raw&item_id=317&element=4572f5ab-8eff-4d4a-9628-c979f5a044e6&method=download

 

[1] The data on M3 are for five member countries, excluding Oman, which does not publish M3.