Lower oil prices to pressure GCC sovereigns’ credit in 2019 - Moody's

Lower oil prices to pressure GCC sovereigns’ credit in 2019 - Moody's
Oman’s rating was downgraded to Ba1 with a negative outlook

Mubasher: Reduced oil prices coupled with lower oil output growth will weaken fiscal and external positions in the GCC region and hinder their economic growth in 2019, Moody's Investors Service said in a report.

The US rating agency noted that Oman’s rating was downgraded to Ba1 with a negative outlook, while ratings of Bahrain, Saudi Arabia, and Kuwait were at B2 with a stable outlook, A1 with stake outlook, Aa2 with stable outlook, respectively.

Government debt will also be accumulated faster than Moody's previously projected, the report added.  

Oil prices are expected to average $62 per barrel (pb) in 2019 and 2020, around the midpoint of the international rating agency's expected medium-term range between $50 and $70 and below the $71 pb average in 2018, Moody's vice president Alexander Perjessy said.

The non-hydrocarbon sector will witnesses modest accelerated growth on the back of higher budgetary expenditures in most countries, fostering popular support for current economic reforms.

Lower oil production together with more modest oil prices will put pressures on external positions in the GCC region, particularly in Oman.