Fitch Ratings has affirmed Qatar's long-term Issuer Default Ratings (IDRs) at 'AA' and removed them from Rating Watch Negative (RWN). The outlook is negative.
The rating actions capture the risk from a further prolongation of the period in which Qatar cannot export liquefied natural gas (LNG) to the sovereign balance sheet, which has held up well so far. The removal from RWN reflects that while the geographic concentration and high complexity of Qatar's LNG facilities is a vulnerability, the risks of further severe damage have reduced since March and the impact of the war on the credit profile will take longer to discern.
The 'AA' rating reflects GDP per capita among the world's highest, large sovereign assets, Fitch Ratings' expectation that additional gas production will further strengthen public finances and a relatively flexible public finance structure. Rating weaknesses include heavy hydrocarbon dependence with a significant vulnerability to geopolitical risks, below-average scores on some measures of governance, higher government debt/GDP than oil-dependent highly rated peers and substantial contingent liabilities, the ratings specialist said.