S&P cautiously affirms AA- rating

Standard & Poor’s (S&P) has affirmed Qatar’s rating at AA-/A-1+ but has cautioned that this might change if the boycott of Qatar by other GCC and Arabs states starts having a measurable effect on the economy.

“We expect the ongoing boycott of Qatar’s economy will lead to slower economic growth and hamper fiscal and external performance as outflows of external financing are offset by drawing upon government assets,” S&P said in a statement. “The Qatari authorities are utilizing the country’s large fiscal assets to limit the impact. We are affirming our ‘AA-/A-1+’ ratings on Qatar and removing them from CreditWatch with negative implications. The negative outlook reflects our view of the potential consequences of the boycott on Qatar’s economic, fiscal, and external metrics, especially if the boycott is tightened or prolonged.”
“We could lower the ratings if policy predictability in Qatar were to become more uncertain,” S&P said. “In order to support its economy and banking system, the Qatari government is liquidating and utilizing part of its fiscal assets. If our estimate of the government’s liquid assets were to fall substantially, we could also lower the ratings.We could raise the ratings if we saw domestic institutions mature faster than we expected, alongside significant improvements in transparency regarding government assets and external data quality.