Creditworthiness of Middle East sovereigns on the decline | GulfNews.com

Creditworthiness of Middle East sovereigns on the decline | GulfNews.com:

"The overall creditworthiness of Middle East and North Africa (MENA) sovereigns, including the GCC sovereigns has deteriorated over past six months with Saudi Arabia, Oman and Bahrain facing negative rating outlook in the context of rising fiscal pressures, according to rating agency Standard & Poor’s.

Assuming average crude prices of $45 (Dh165) for the current year, S&P expects current ratings and outlooks to hold for GCC countries as many of them continue to retain substantial government reserves and have initiated fiscal reforms to balance budgets and contain reserve erosion.

“In October 2015 we downgraded Saudi Arabia’s ratings to ‘A+’ from ‘AA-’ due to the deterioration in the Kingdom’s fiscal position. Saudi Arabia’s general government fiscal deficit widened to about 15 per cent of GDP in 2015, from 1.5 per cent in 2014, primarily reflecting the sharp drop in oil prices. Absent a rebound in oil prices, we now expect general government deficits of 10 per cent of GDP in 2016, 8 per cent in 2017, and 5 per cent in 2018, based on planned fiscal consolidation measures,” said Standard & Poor’s sovereign analyst Trevor Cullinan."



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