Moody’s lifts outlook on Qatar on improved debt metrics

Moody’s lifts outlook on Qatar on improved debt metrics

Moody's Investors Service has changed the outlook on Qatar to positive from stable as the gas importer improved its debt metrics in 2021-22 due to elevated energy prices, which can be sustained in the medium term, even if prices moderate in few years.

The ratings agency also affirmed Qatar's long-term issuer and foreign currency senior unsecured debt ratings at Aa3 and the government's (P)Aa3 foreign-currency senior unsecured medium-term note program rating.

"Qatar's planned expansion of its liquefied natural gas (LNG) production capacity and the likelihood that the government reduces capital spending after hosting the FIFA World Cup this year have the potential to compensate for lower revenue due to lower energy prices and hence prevent a deterioration in debt metrics over the longer term," said Moody's in a new report on Wednesday.

Additionally, Qatar's exceptionally high level of per-capita income, vast hydrocarbon reserves with low extraction costs, the government's robust net asset position, and an established track record of macroeconomic and fiscal policy effectiveness are supportive factors, it said.

A surge in oil and LNG prices since 2020 has generated a large revenue windfall for Qatar, turning its small fiscal deficit in 2020 and balanced budget in 2021 into a large fiscal surplus this