Mubasher: Qatar's fiscal deficit is slashing despite the Saudi-led economic boycott of Qatar that brew in June 2017, according to the recent data of Fitch Ratings.
However, the diplomatic dispute between Qatar and the four Arab countries still poses risks to public finances, the international rating agency added in a report, citing the Negative Outlook on Qatar's 'AA-' sovereign rating.
Fitch's headline measure of the fiscal deficit of the world's richest country per capita to fall to 2.5% of GDP in 2017 from 5.1% a year earlier, comprising the Qatar Investment Authority's (QIA) estimated investment income, according to the report.
“The expected improvement results from recovering oil and gas prices and an associated rebound in nominal GDP and government revenue,” the report said.
Doha's fiscal deficit reached QAR24.7 billion in the first three quarters of 2017 (5.5% of GDP during the period), with revenues up 0.9% and spending up 1.5% in the same period of 2016, the Qatar Central Bank's (QCB) figures showed, excluding QIA income.
The report highlighted signs of broader economic resilience, citing that non-resident interbank and customer deposits at banks operating in the wealthy GCC nation increased in December 2017 for the first time since June.
“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. International oil companies are keen to participate in expanding Qatar's LNG production,” Fitch said.
