Qatar’s Sovereign Ratings Weighed Down by High Public Sector Debt Despite Detente: Fitch Ratings

An improvement in regional relations between Qatar and its regional ‘Quartet’ (Saudi Arabia, the United Arab Emirates, Bahrain and Egypt) is anticipated with the upcoming Gulf Cooperation Council (GCC) summit on the 5th of January 2021, according to Fitch Ratings (Fitch).

However, high public sector debt will likely continue to pull down Qatar’s sovereign ratings. The increase in geopolitical risks facing Qatar in 2017 led to Fitch’s downgrade of the country’s sovereign rating to AA- from AA in August 2017, with this rating affirmed in June 2020 (Outlook Stable). Fitch notes that high leverage will remain a key constraint.

Fitch estimates Qatar’s general government debt-to-gross domestic product (GDP) to reach 76% in 2020, up from a ra...