Negative 2021 Outlook for GCC Sovereigns Amidst Lower Oil Incomes and Reduced Fiscal Strength: Moody’s

Moody’s Investors Service (Moody’s) has reported a negative outlook for credit worthiness amongst the Gulf Cooperation Council (GCC) nations in 2021. The negative outlook reflects the fall in oil revenue to GCC nations due to the impact of the COVID-19 pandemic, which is a key contributor to deteriorating fiscal strength.

Declines in oil revenue are also anticipated to constrain government spending and slow down the region’s economic growth. Moody’s forecasts GCC sovereigns to return to pre-pandemic real GDP levels only in around two to three years’ time, with the recovery most prolonged in economically diverse countries.

GCC government debt burdens are forecast to rise by around 21 percentage points (ppt) of GDP on average between 2019-...