Mubasher: Moody's Investors Service on Friday placed Qatar's Aa2 government bond and issuer ratings on review for downgrade.
The rating agency said it will assess the extent of the impact of the further sharp fall in oil prices, which it expects to remain low for several years, on Qatar's economic performance and the balance sheet of its government in the coming years.
Qatar is highly dependent on hydrocarbons to drive economic growth and to finance government expenditure. Oil and gas accounted for 75% of goods exports and more than 50% of GDP during 2010-2014. It also provided more than 80% of total government revenues during the same period.
The government's focus on continued capital spending on infrastructure projects in the run-up to the 2022 FIFA World Cup, in combination with depressed oil prices over the coming years, would imply that Qatar's fiscal balance will turn into a deficit of more than 6% of GDP on average until 2018, and a rise of 10 percentage points in Qatar's debt burden over 2016-18 compared to Moody's estimate of general government debt of around 33% of GDP in 2015, according to the rating agency.
