Doha: The total reserve assets of the Gulf Cooperation Council (GCC) countries reached USD 804.1 billion by the end of the first half of 2024, marking a 7.5 percent increase compared to the end of 2023. This figure represents approximately 4.9 percent of global foreign exchange reserves.
According to Qatar News Agency, data released by the Statistical Centre for the Cooperation Council for the Arab States of the Gulf (GCC-Stat) shows that the GCC ranked fifth worldwide in terms of international reserve holdings, following China, the European Union, Japan, and Switzerland.
The growth in reserve assets was primarily driven by higher oil revenues, as the average price of Brent crude oil stood at approximately USD 84 per barrel during the first half of 2024. Given that oil revenues constitute the largest portion of the GCC’s financial resources, the rise in global crude prices significantly bolstered the region’s foreign reserves. Additionally, gains in financial asset valuations in international markets further contributed to this increase.
GCC-Stat data also revealed that the total assets of commercial banks operating in the GCC surged to approximately USD 4.3 trillion by mid-2024, reflecting an 8.4 percent increase from year-end 2023 levels.
Foreign reserve assets encompass various financial instruments, including monetary gold, special drawing rights (SDRs), reserve holdings at the International Monetary Fund (IMF), foreign exchange balances, and investments in overseas deposits and securities. These reserves play a crucial role in ensuring economic stability by enabling countries to cover import needs, maintain confidence in monetary policy, stabilize exchange rates, and absorb external economic shocks.
A key measure of foreign reserve adequacy is the number of months a country’s reserves can cover its imports. The GCC’s reserves currently provide import coverage for approximately 15 months, three times higher than the IMF’s recommended benchmark of 3 to 6 months.
According to GCC-Stat, bank deposits in commercial banks across the GCC rose to a historic high of USD 2 trillion by the end of the first half of 2024, reflecting a 6.2 percent increase compared to year-end 2023 and a 9.9 percent rise compared to the same period in the previous year.
Meanwhile, total loans extended by commercial banks in the region reached approximately USD 1.97 trillion, increasing by 8.3 percent year-over-year and 5.1 percent compared to year-end 2023. Notably, private sector borrowing accounted for 81.1 percent of total loans issued within the GCC, underscoring the sector’s growing reliance on bank financing.
The GCC has witnessed a significant expansion in money supply in recent years. By mid-2024, the money supply in its narrow sense (M1), which includes demand deposits and cash in circulation, stood at USD 781 billion, up 2.7 percent from the end of 2023. The broader measure of money supply (M2), which includes M1 plus quasi-cash deposits such as time and savings deposits in both local and foreign currencies, reached USD 1.71 trillion, reflecting a 5.8 percent increase.
Money supply growth is a critical indicator of economic liquidity, with broader liquidity expansion often linked to stronger real GDP performance. The increase in money supply was driven by a 7.4 percent rise in cash in circulation, a 7.2 percent increase in demand deposits, and a 4.6 percent growth in quasi-cash deposits.
According to GCC-Stat, quasi-cash deposits accounted for 54.1 percent of total money supply, while demand deposits and cash in circulation made up 39.4 percent and the remaining share, respectively.