Gulf companies face mounting difficulties in refinancing loans as the global credit crisis worsens and government oil and gas revenues decline, according to global credit ratings agencies.
GCC countries are more integrated with the global economy than they have been in the past, Moody’s Investors Service said in a report yesterday. That has left companies in the region, especially those in the UAE and Qatar where foreign investment and borrowing have propelled recent economic growth, more vulnerable to the shocks that have reverberated through the global financial system.
While oil revenues and some of the largest sovereign wealth funds will help support a corporate sector that is significantly owned by government, their ability to provide direct support could reach its limits. “Overall credit quality in the region has declined, and is likely to continue to do so going forward,” Moody’s said.
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