Standard Chartered forecasts a strong credit outlook for Qatar as a result of its liquefied natural gas (LNG) expansion, strong public finances, robust balance sheet and positive ratings momentum. 

 

According to the bank’s latest Mena Credit Outlook 2024, Qatar recorded a $11.5 billion fiscal surplus for 9M-2023, approximately 4.9% of GDP, building on last year's 10.3% surplus, with public finances also set to improve further on rising LNG production. 

 

QatarEnergy's groundbreaking on the North Field expansion in October 2023 underscores the nation's efforts to increase LNG production, with several long-term offtake agreements already signed.

 

Debt-to-GDP to fall

This is in addition to a decline in government-funded capex following a period of elevated spending in the run-up to the 2022 FIFA World Cup. The bank estimates that, following a decline to c.42% in 2022 from a high of c.73% in 2020, Qatar‘s debt-to-GDP should fall further in 2023-24 as the government continues to use its sizeable fiscal surpluses towards debt repayment.

 

Banks’ foreign liabilities, historically a vulnerability of the sector, are also declining following regulatory directives by the central bank and slowing credit growth. After a sharp rise in 2018-21, banks’ foreign liabilities fell to QR655 billion ($180 billion) in September from a high of QR718 billion in March 2022.

 

The research also notes that any debt issuances by Qatar in 2024 will be opportunistic, as it’s yet to issue Eurobonds since 2020, reflecting its deleveraging priorities.

 

Muhannad Mukahall, CEO and Head of Corporate, Commercial and Institutional Banking, Qatar, Standard Chartered, said: "Qatar's strategic investments in LNG production and strong fiscal indicators reinforce our positive outlook for the nation’s continued economic growth in 2024.”--TradeArabia News Service