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S&P affirms A+, A-1 ratings on Qatar

DUBAI — Standard & Poor's Ratings Services said yesterday it affirmed its 'A+' long-term and 'A-1' short-term sovereign credit ratings on the State of Qatar on strong financial performance. The outlook is stable.

At the same time, Standard & Poor's affirmed its 'A+' foreign currency issuer credit rating on Qatar Petroleum. The outlook is stable. In addition, the 'A+' senior unsecured debt rating on the $700 million notes maturing in October 2010, issued by Qatar Global Sukuk QSC, was affirmed.

"The ratings on Qatar are supported by prudent and sustainable fiscal policy that results in strong budgetary outturns, by substantial external liquidity, healthy economic prospects driven largely by the gas industry, and by the ongoing improvement in domestic political institutions," said Standard & Poor's credit analyst Luc Marchand. "The ratings remain constrained primarily by the geopolitical risks facing sovereigns in the Gulf region, which are higher than for other 'A' rated sovereigns."

Standard & Poor's expects Qatar's strong fiscal performance to continue. Assuming an average Brent crude price of about $66 per barrel, a fiscal surplus of about 10 per cent of GDP is projected in fiscal year 2006/2007 (ending March 31, 2007). General government debt is expected to continue declining to 24.5 per cent of GDP at fiscal year-end 2006/2007. Taking into account our estimate of government assets, the state is expected to record a net asset position of about 65 per cent of GDP in fiscal 2006/2007.

Qatar's GDP per capita, estimated at $61,540 in 2006, is among the world's highest. Real economic growth is expected to maintain its impressive pace, at about 10 per cent in 2007.