(MENAFN– The Peninsula)

Deepak John
|
The Peninsula

Doha, Qatar: Qatar’s fiscal and balance of payments positions remain strong, underpinned by its large hydrocarbon reserves, leading position in the global liquified natural gas (LNG) market, and substantial assets accumulated in the sovereign wealth fund.

Standard & Poor’s (S&P) Global Ratings has affirmed the long and short-term foreign and local currency sovereign credit ratings of Qatar at ‘AA/A-1+’. The outlook for the ratings remains stable.

“The stable outlook reflects our view that Qatar’s fiscal and external buffers should continue to benefit from the country’s position as one of the world’s largest exporters of LNG over the next two years, further boosted by production increases through the NFE project over 2026-2030,” according to S&P.

“Our ratings on Qatar remain supported by its sizable external and fiscal net asset positions, underpinned by funds accumulated within the sovereign wealth fund, the Qatar Investment Authority (QIA), from past exports of hydrocarbons, in particular LNG. We forecast the government’s liquid assets will average 165% of GDP over 2024-2027.”

“We expect Qatar to remain one of the largest exporters of LNG globally. The government plans to increase Qatar’s LNG production capacity to 126 million tons per year (mtpa) by 2027 from 77 mtpa currently and further to 142 mtpa before 2030, an almost 85% increase above the current capacity. In our forecast, we assume that actual LNG production will be largely flat until 2025 but increase by about 35% from current levels by 2027,” it added.

The report further noted,“As we expected, Qatar’s real GDP growth decelerated to 1.2% in 2023 after 4.2% in 2022 when the country hosted the FIFA World Cup. We expect real GDP to expand by 2% on average in 2024-2025, supported by non hydrocarbon sectors, such as wholesale and retail trade, finance, and hospitality. We forecast growth will temporarily accelerate to 7% in 2027 as additional gas production starts and the spillover effects also benefit the non hydrocarbon sector.”

Qatar’s income levels remain among the highest of rated sovereigns, supporting its credit profile. We forecast GDP per capita should increase above $80,000, once the NFE project boosts LNG production after 2026.

“We do not expect significant economic policy shifts over the forecast period through 2027. We anticipate that government policy will continue to focus on the prudent development of the hydrocarbons sector, alongside further attempts to promote private sector activity and diversify the economy under the Third National Development Strategy,” S&P added.

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