Qatar’s sovereign ratings have been evaluated as ‘stable’ by S&P Global Ratings. The agency believes the country will continue to effectively counter any possible economic and financial fallout of the blockade. Fiscal and external surpluses will continue from 2019 to 2022 due to Qatar’s prudent economic policies.
S&P noted ongoing investments in major infrastructure projects will continue to support the country’s economic activity. It said the financial system has stayed resilient in the wake of adversity and the authorities have helped with additional confidence-building measures. Confidence in the financial sector is reflected by increasing non-resident deposits, the ratings agency said.
For 2019 to 2022, S&P has projected a current account surplus averaging 4.5 per cent of Qatar. This is based on the assumption hydrocarbon prices will be lower starting from 2021. It expressed confidence sufficient resources are available to deal with consequences of the siege as most of its export revenues come from LNG exports to Asia.
Addressing the banking sector, S&P said, “We do not expect Qatari banks will need additional government support after liquidity injections of about $40bn from Qatar Central Bank (QCB) and other public sector entities, mainly Qatar Investment Authority (QIA). The Qatari banks’ strong capital generation and funding profiles, backed by public sector deposits, should further support the banking system,” S&P said.