Qatar affirmed by S&P, standing out amid Gulf state downgrades

Bloomberg

Qatar’s AA credit rating was affirmed by Standard and Poor’s, which cited the nation’s ample natural gas reserves and an infrastructure investment program as drivers of continued growth.
The country is standing out amid the spate of downgrades S&P has issued for energy exporters whose credit outlooks have worsened on plunging oil prices. The rating company has already cut three of the six members of the Gulf Cooperation Council countries. They had been forced to trim the government spending that has fueled economic growth over the past decade, while increasing borrowing to make up for the shortfall in revenue. “Qatar’s economy will remain resilient,” S&P said of the world’s largest liquefied natural gas exporter. “Qatar has accumulated considerable foreign assets over the past decade, as a result of developing its natural resources.”
S&P, which has been the toughest among ratings firms on emerging-markets’ creditworthiness, said the outlook on Qatar’s AA rating, the third-highest investment grade, is stable.
Amid lower hydrocarbon revenues and increased spending under a $200 billion infrastructure investment plan, Qatar is prioritizing its expenditures to ensure that the most strategic and important projects are completed ahead of the 2022 FIFA World Cup it is hosting, S&P said.
The economy is “supported by solid macroeconomic fundamentals, although we anticipate continued institutional weaknesses and only a moderate increase in hydrocarbon prices over the next two years,” the rating company said in the statement.