Debt to weigh on Qatar’s ratings, even after GCC detente | ZAWYA MENA Edition
Normalization of relations between Qatar and its neighbors would be credit positive for Qatar, but high public sector debt will remain a drag on the country’s sovereign ratings, says Fitch Ratings.
There have been recent signs of progress towards a resolution of the dispute that began in mid-2017 between Qatar and the ‘Quartet’ (the United Arab Emirates, Saudi Arabia, Bahrain and Egypt) and resulted in the near-complete rupture of trade, financial and diplomatic relations.
The GCC summit on Jan. 5 2021 may reveal the scope of any agreement. Normalization, if it occurs, would be likely to proceed gradually, beginning with bilateral steps between Saudi Arabia and Qatar.
Improved regional relations would bolster prospects for Qatar’s non-oil economy over the medium term, once the impact of the coronavirus pandemic fades.
A resumption of travel links could eventually lift tourism inflows, and greater interest from buyers elsewhere in the region could buoy the local real-estate market.
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