CI affirms Qatar’s long, short-term foreign, local currency ratings

CI affirms Qatar’s long, short-term foreign, local currency ratings

Global credit rating agency Capital Intelligence Ratings (CI) has affirmed the long-term foreign currency rating (LT FCR) and long-term local currency rating (LT LCR) of Qatar at ‘AA-’.

The sovereign’s short-term FCR (ST FCR) and short-term LCR (ST LCR) have been affirmed at ‘A1+’. The outlook for the ratings remains "stable".

The ratings are supported by the country's strong external position, with significant current account surpluses and substantial government assets under the management of the sovereign wealth fund, the Qatar Investment Authority (QIA).

The ratings are also supported by the sovereign’s very large hydrocarbon reserves, high fiscal strength, and low domestic political risk.

CI said Qatar’s public and external finances are strong, reflecting persistent fiscal surpluses and substantial holdings of external assets.

During 2000-20, the budget surplus averaged around 9% of gross domestic product (GDP), a large part of which was invested in external assets. As a result, the QIA’s total assets are estimated to be in the region of $300bn (177% of GDP in 2021).

Qatar’s fiscal and external positions have also benefited from the rebound of hydrocarbon prices over the past year.

CI estimates that the current account registered a surplus of 8.5% of GDP in 2021 compared to a deficit of 2.5%