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Investing.com -- Fitch Ratings has reaffirmed Qatar’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ’AA’ with a Stable Outlook on March 17, 2025. The ’AA’ rating reflects the nation’s high GDP per capita, the anticipated increase in gas production that will bolster public finances, and a flexible public finance structure. However, the rating also takes into account the country’s heavy reliance on hydrocarbons, below average governance scores, and higher government debt/GDP compared to other oil-dependent, highly-rated countries.
Fitch projects Qatar’s general government (GG) budget surplus to be 3.9% of GDP in 2025, down from 4.8% of GDP in 2024. This includes investment income from the Qatar Investment Authority’s (QIA) external assets. The forecasted decrease in oil and gas revenue is based on the assumption that the Brent oil price will average $70 per barrel in 2025, down from $80 per barrel in 2024.
Qatar Energy (QE) plans to expand its liquefied natural gas (LNG) production capacity significantly, from 77 million tonnes per year (mtpa) to 110 mtpa in 2026, and then to 126 mtpa by the end of 2027. Further expansion to 142 mtpa is planned by the end of 2030.
Fitch also anticipates Qatar’s fiscal breakeven oil price to decrease to $58 per barrel in 2027 from around $73 per barrel in 2024. This is due to the expected increase in LNG revenue from the North Field expansion project, which is set to start contributing to fiscal revenue from 2026.
The agency projects Qatar’s debt/GDP to decrease to around 43% by 2027 from 49% in 2024. This projection is based on the expectation that the government will refinance most of its upcoming external market debt maturities and pay down external loans with a moderate budget surplus, excluding QIA investment income.
Fitch estimates that Qatar’s sovereign net foreign assets (SNFA)/GDP rose to 187% ($398 billion) in 2024 from 163% ($347 billion) in 2023. This increase is attributed to a rise in the QIA’s estimated assets, which were likely boosted by asset market returns.
In 2024, Qatar’s economy became a net external creditor at 22% of GDP. This position is expected to strengthen with lower borrowing and more capital exports.
Qatar’s banking sector, with assets of 265% of GDP and net foreign liabilities of over $117 billion in 2024, represents a substantial contingent liability. The government has a history of supporting the sector and maintains a liquid assets buffer to support banks in case of a loss of confidence by non-resident depositors and investors.
Qatar’s relations with the Gulf Cooperation Council have generally normalized over the years, although points of tension still exist. High regional tensions and uncertainty around US Middle East policy contribute to the persistence of regional geopolitical risks.
In terms of ESG considerations, Qatar has an ESG Relevance Score (RS) of ’5[+]’ for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the weight that the World Bank Governance Indicators (WBGI) have in Fitch’s proprietary Sovereign Rating Model.
The Country Ceiling for Qatar is ’AA+’, one notch above the LT FC IDR. This reflects moderate constraints and incentives, relative to the IDR, against capital or exchange controls being imposed that would prevent or significantly impede the private sector from converting local currency into foreign currency and transferring the proceeds to non-resident creditors to service debt payments.
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