Moody's revises Qatar's economic outlook

The ratings agency Moody's says it is changed its outlook on Qatar's economy to negative, largely due to the ongoing diplomatic dispute now engulfing the tiny, energy-rich nation.

Moody's said in a statement early Wednesday that "the likelihood of a prolonged period of uncertainty extending into 2018 has increased and a quick resolution of the dispute is unlikely over the next few months."

Moody's says that "carries the risk that Qatar's sovereign credit fundamentals could be negatively affected."

So far, Moody's says Qatar's exports of natural gas have yet to be affected. Those exports make the small country's citizens have the biggest per capita incomes in the world.

WHAT COULD MOVE THE RATING UP/DOWN

The negative outlook reflects Moody's view that risks to Qatar's credit profile are skewed to the downside.

Having said that, a swift resolution of the ongoing political dispute accompanied by a quick lifting of sanctions would potentially support a return to a stable outlook. In addition, the following factors could lead to upward rating pressure:(1) a material reduction in external vulnerabilities through a lower external debt level and continued build-up of external buffers; (2) improved transparency about the type of financial assets held by the government, including the disclosure of details about asset composition and size; (3) improvements with regard to timeliness and scope of data availability; and (4) a more diversified economic base.

Source: Khaleej Times