S&P Affirms Qatar Ratings At 'AA/A-1+' With Stable Outlook

(MENAFN- The Peninsula) Deepak John | The Peninsula

Doha, Qatar: Standard & Poor’s (S&P) Global Ratings, a leading credit rating agency affirmed ‘AA/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on Qatar. The outlook is stable and the transfer and convertibility assessment remains at ‘AA+’.

According to the rating agency,“The stable outlook reflects our view that Qatar’s large financial buffers should enable sufficient fiscal and external space to offset the impacts of adverse geopolitical developments, including temporary disruptions to the production and export of LNG.”

Qatar’s strong fiscal, external, and economic flexibility will,“in our view, buffer the negative effects of the regional conflict. We estimate the government’s consolidated net asset position at 135% of GDP in 2026. The Qatar government’s liquid assets include funds held at a specific budget stabilisation fund, along with assets at Qatar’s sovereign wealth fund, Qatar Investment Authority (QIA), and Qatar Central Bank (QCB),” it noted.

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These provide significant scope to counter volatility, support economic fundamentals, or aid recovery during a period of heightened geopolitical uncertainty with weaker growth and fiscal revenue, it added.

S & P ratings further stated,“We believe this flexibility will enable Qatar to withstand the temporary disruption of LNG production and export routes.”

“We expect Qatar to remain one of the largest exporters of LNG globally. The government plans to increase Qatar’s LNG production capacity to 126 million tonnes per year (mtpa) by 2027 and to 142 mtpa before 2030, an almost 85% increase over the current capacity of 77 mtpa. Although the country could fall short of these targets, we expect the production hike will strengthen growth momentum and strong fiscal and external balances from 2027.

“We forecast the general government fiscal balance will weaken this year, but strengthen to a surplus of about 6% of GDP by 2029. The strengthening will be supported by higher LNG volume production from Qatar’s LNG expansion, which although possibly delayed by the current conflict, we believe will still come on stream,” it added.

Qatar’s reducing debt stock and strong foreign exchange reserves mitigate downside risks, S&P pointed out“We estimate Qatar’s gross government debt at 45% of GDP in 2026 which we expect will fall to about 33% by 2029 with the government’s debt-repayment strategy and significant increase in the nominal GDP and revenue tied to the North Field expansion."

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