International credit rating agency Standard & Poor's (S&P)on 15 July announced the upgrade of Doha's long-term sovereign foreign currency rating by two notches to A+ from A- and its long-term local currency rating to A+ from A. Short-term foreign and local currency ratings were affirmed at A1 and the ratings outlook set at stable. State-owned Qatar Petroleumalso had its long-term foreign currency issuer credit rating raised to A+ from A-.
S&P attributed the upgrade to Doha's prudent fiscal policy, based on a conservative oil price estimate, high external liquidity and strong gross domestic product (GDP) growth.
'The upgrade primarily reflects ambitious political reforms, strong projected GDP growth, continued fiscal prudence and a decrease in the government's debt and debt service burdens,' said S&P credit analyst Luc Marchand. Doha's ratings are constrained by the high level of project-related borrowing in recent years and the slow evolution of the political system, the agency added.
S&P's A+ long-term foreign currency rating puts Qatar on a par with Kuwait with the highest sovereign rating in the Gulf. Doha is rated A3 by Moody's Investors Serviceand A- by Cyprus-based Capital Intelligence.
Bond spreads tightened marginally on news of the upgrade.
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