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Standard Chartered’s MENA Credit Outlook forecasts robust performance for Qatar in 2024

Standard Chartered’s MENA Credit Outlook forecasts robust performance for Qatar in 2024
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Mubasher: The latest MENA Credit Outlook 2024 by Standard Chartered anticipated a strong credit outlook for Qatar next year, according to a press release.

The robust performance is driven by Qatar’s liquefied natural gas (LNG) expansion in addition to its strong public finances as well as solid balance sheet and positive ratings momentum.

CEO and Head of Corporate, Commercial, and Institutional Banking for Qatar at Standard Chartered, Muhannad Mukahall, said: "Qatar's strategic investments in LNG production and strong fiscal indicators reinforce our positive outlook for the nation’s continued economic growth in 2024.”

During the first nine months (9M) of 2023, Qatar generated fiscal surplus worth $11.50 billion, which accounted for nearly 4.90% of the gross domestic product (GDP), building on 2022's 10.30% surplus.

According to Standard Chartered, the Gulf state’s public finances are also set to improve further on increasing LNG production. QatarEnergy's groundbreaking on the North Field expansion in October 2023 reflected the efforts exerted by the country to boost LNG production along with long-term offtake agreements that are already signed.

The positive outlook is also attributed to lower government-funded capital expenditure which followed elevated spending in the run-up to the 2022 FIFA World Cup. Therefore, following a downward performance to c.42% in 2022 from a high of c.73% in 2020, the debt-to-GDP of Qatar would decrease throughout 2023/2024 as the Qatari government continues to use its sizeable fiscal surpluses towards debt repayment.

Meanwhile, Qatari banks’ foreign liabilities are also plunging following regulatory directives by the central bank as well as slowing credit growth.

Standard Chartered further expects that any debt issuances by Qatar in 2024 will be opportunistic given the country is yet to issue Eurobonds since 2020, which will reflect its deleveraging priorities.