DOHA: Qatar’s steady economic performance has got further endorsement from the international rating agencies, which expect the government’s infrastructure plan to underpin economic activities in the country. The ratings affirmation, according to S&P, reflects its expectation that the authorities will continue to actively manage the downside impact of the blockade while preserving Qatar’s core rating strengths, including strong public finances. Analysts believe the high level of government assets will remain a core strength of Qatar’s rating.
In an update, the global rating agency said the Qatari government has taken measures to support confidence in Qatar’s banking system, including the repatriation into the domestic banking system of $43 billion (26% of GDP) in public sector–mostly Qatar Investment Authority–assets, previously held abroad.
Fitch expects its headline measure of Qatar’s fiscal deficit to decline to 2.5% of GDP in 2017 from 5.1% in 2016, including estimated investment income of the Qatar Investment Authority.
The demand for recent bond and loan placements by Qatar National Bank suggest continued interest among non-resident institutional investors (primarily from Asia-Pacific) in exposure to the country, the report said, adding international oil companies are keen to participate in expanding Qatar’s liquefied natural gas production.
Highlighting that there are also signs of broader economic resilience, Fitch said the central bank data show non-resident interbank and customer deposits at Qatar’s commercial banks grew in December for the first time since June, when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic, financial and trade links with Qatar and closed air, land and sea borders.
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