Analysis

S&P Affirms Qatar’s Credit Rating at AA- with a Stable Outlook

On May 10th, 2019 S&P published an affirmation of Qatar’s credit rating at AA- with a Stable Outlook. The stable outlook reflects Qatar’s prudent fiscal management and investment-led economic growth, leading to a fiscal surplus of $US1.2bn in 2019 – the first surplus in three years – and an expected GDP growth rate of 2%.

S&P has noted Qatar’s resilience to the pressures of an air, land and sea blockade. Qatar’s economy is driven by government investment: At an estimated 45% of GDP, Qatar’s investment spending is among the highest of all the sovereigns rated by S&P.

 

The stable outlook primarily reflects our view that Qatar will continue to effectively mitigate the economic and financial fallout of the boycott imposed on the country in June 2017… and that Qatar will continue to pursue prudent macroeconomic policies that support large recurrent fiscal and external surpluses over 2019-2022.”

Research Summary, S&P Ratings, May 10th, 2019

 

The impact of the boycott on Qatar’s external performance has been limited; most of its export earnings from natural gas come from Asian customers.

 

“Investments related to the government’s sizable infrastructure program will continue to support economic activity, outweighing negative sentiment related to the ongoing boycott.”

Research Summary, S&P Ratings, May 10th, 2019

 

 

 

(Image Source: Wall Street Journal)

 

 

 

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