Standard and Poors headquarters - via Wikimedia Commons
CAIRO – 27 August 2017: Qatar’s economy outlook was affirmed at AA-/A-1+ for long and short term foreign and local currency sovereign ratings by international rating agency S&P Global Ratings on Friday.
S&P has given Qatar’s economy a negative outlook, removing it from the CreditWatch, on which it placed Doha in June following the boycott announced by four Arab states.
The rating agency said the outlook is reflecting S&P’s view of the long-term consequences of the boycott on economic and fiscal abilities.
S&P justified its action due to the following reasons:
• Arab boycott will continue for an extended period, but will not escalate.
• The ongoing boycott will lead to slower economic growth and hamper fiscal performance.
• Qatari authorities are utilizing the country's large fiscal assets to limit the impact.
• Non-resident deposits are expected to keep declining.
• Qatari government’s external finances to keep weakening over the short-term.
In the report, S&P said that raising the rating for Qatar could happen if local institutions moved faster than its expectations. Meanwhile, the rating could be lowered in case the boycott reduced economic wealth and liquid assets.