SINGAPORE/DOHA: Qatar’s Aa2 government bond rating and stable outlook reflected the country’s exceptional economic and government financial strength, Moody’s Investors Service said in a report yesterday.
It also said non-hydrocarbon investments will help sustain high growth rates of 5 percent to 6 percent in 2013 and 2014.
The surge in hydrocarbon receipts in recent years has strengthened government finances and bolstered the large current account surpluses, while domestic politics remain stable.
The rating agency’s report is an annual update to the markets and does not constitute a rating action.
Moody’s said Qatar’s fiscal breakeven oil price remains among the lowest in the Gulf Cooperation Council (GCC) despite a large step-up in spending that has been driven in part by capital spending on infrastructure development.
Credit support also comes from the government’s offshore financial assets, which provide a considerable cushion to absorb oil price risks.
It also said that the government’s liquidity and external risks remained very low given QIA’s large and presumably liquid assets.
Qatar’s population is among the fastest-growing in the world. Major infrastructure projects are in the pipeline, including a new airport, metro network, port and rail freight lines.
Moody’s warned about some challenges facing the country that include the public sector’s gross debt burden which has climbed sharply in recent years, especially when taking into account the debt of state-owned enterprises.
Moody’s also said the smooth transition of power conducted in June 2013, which saw the Father Emir H H Sheikh Hamad bin Khalifa Al Thani, transfer power to H H Sheikh Tamim bin Hamad Al Thani reduced uncertainty related to succession risk and largely assured policy continuity, especially with regard to economic and fiscal management.
The Peninsula
