Daily Economic Update

Qatar: Signs deals with the US worth $243 billion in addition to much higher economic commitments. During US President Trump’s visit to Doha yesterday, Qatar signed an agreement to generate an “economic exchange” of up to $1.2 trillion (5.5 times Qatar’s GDP) between the two countries, while signing deals worth $243 billion relating to airplanes, energy, quantum technologies, and defense equipment. According to media sources, Qatar Airways agreed to purchase up to 210 Boeing aircrafts in a deal worth $96 billion, a boon for the struggling US company which has not posted a profit since 2018. Other agreements include a partnership between QatarEnergy and McDermott worth $8.5 billion, where the latter will provide components for Qatar’s offshore LNG plants. Quantinuum, a US-based quantum computing company, also inked a joint venture agreement with Al Rabban Capital worth $1 billion. Qatar also outlined a $38 billion investment plan for the US-owned Al-Udeid air base, further boosting the country’s air defense and maritime security, though signed deals at this stage were only $3 billion, split between Raytheon ($1 billion) and General Atomics ($2 billion).

Oil: OPEC+ output falls in April while oil demand growth forecasts are kept unchanged. OPEC, in its oil market report for May, struck a cautiously optimistic tone on the prospects for international trade following the US-China agreement to reduce tariffs for 90 days. OPEC kept its oil demand growth forecasts steady for this year and next, at 1.3 mb/d, bolstered by strong air travel and healthy road mobility, implying robust demand for transportation fuels such as gasoline and Jet/kerosene. This remains nearly 0.6 mb/d higher than the International Energy Agency’s (IEA) projection for the same period, though the IEA is set to release updated figures today. On the supply side, lower oil prices due to macroeconomic turbulence and an accelerated voluntary cut unwind are set to lower non-OPEC+ supply growth in 2025-26 by 100 kb/d each to 0.8 mb/d, mainly due to downward revisions to US production. In April, OPEC-8 members were expected to add 138 kb/d m/m back to the market as per the announced schedule, though output only rose 25 kb/d m/m, with Saudi Arabia, the UAE and Russia leading the gains amid a decline in Kazakhstan, Kuwait, and Iraq. In Kazakhstan, crude production remained near record levels of 1.8 mb/d, still around 413 kb/d higher than the 1.41 mb/d required when considering its compensatory cut pledges. For the wider OPEC+ group, output (including quota exempt members) fell by 106 kb/d m/m to 40.92 mb/d, with the declines led by Kazakhstan (-41 kb/d), Nigeria (-28 kb/d), and Malaysia (-17 kb/d), according to OPEC secondary sources. The decline in April is likely a one-off as OPEC-8 announced an acceleration in the pace of voluntary cut unwinding of 411 kb/d for May and June and as members (Kazakhstan especially) continue to flout the group’s obligations by maintaining production at near-record levels.

China: Credit growth continues to soften but GDP outlook being upgraded given the tariff de-escalation. Credit growth continued to soften, falling to a lower-than-expected 7.2% y/y in April (7.4% in March), a multi-decade low.  After being in double-digits for the past two decades, credit growth had slipped to single digits early last year and remained on a downtrend since. It remains to be seen whether the PBoC’s easing policy and its efforts to boost credit at large will succeed in arresting the decline in credit growth. On a more positive note, China’s GDP growth outlook is being upgraded following the tariff de-escalation with the US; several global banks have recently raised their forecasts by anywhere between 0.3 and 0.7 percentage points for 2025, taking their forecasts not far from the government’s ‘around 5%’ growth target for 2025. In fact, Chinese equities have shown resilience in the face of major headwinds so far this year with the CSI 300 index recouping its YTD loss after rallying by 10% since 7 April while the offshore Hang Seng index has been one of the best performing indices globally YTD, soaring by 18%. 

Chart 1: China credit growth (% y/y) Source: Haver

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