The net foreign asset position of Qatar’s banks is "sizeable but manageable"; the Economist Intelligence Unit said and noted the sector is "well regulated".
In its latest update, the EIU said "while net external liabilities pose risks, strong prudential indicators insulate (Qatar’s) banks from a deterioration in asset quality arising from the 2020 recession."
"The non-performing loan ratio is low, and profitability levels are moderate," the EIU noted.
Macroeconomic indicators have "improved" since the pandemic-induced slump in 2020, including a "return to positive" global and Qatari economic growth.
“We estimate that the fiscal account will have returned to surplus in 2021 owing to recovering global oil and gas prices, which will ease public debt pressures. Qatar's debt obligations are high, but its ability to fully service them is not in doubt, supported by ample foreign reserves and the assets of the Qatar Investment Authority (QIA), the sovereign wealth fund,” the EIU said.
The "rating is supported by a recovery" in international hydrocarbons prices and an estimated shift from deficit to surplus on the current account in 2021. The Qatari riyal's peg to the dollar will continue to be backed by "healthy" foreign reserves and QIA assets, the EIU said.
That said, the EIU noted Qatar's “overdependence” on hydrocarbons exports leaves it exposed to international price movements. The Qatar National Vision 2030 diversification programme will shape policy. The large stock of public debt weighs on the outlook, but a sound financial system is supportive.
Previously, the EIU noted Qatar's overall business environment score has improved from 6.56 for the historical period (2016 to 2020) to 7.35 for the forecast period (2021 to 2025). This has helped Qatar's global ranking to improve by eight places from 36 to 28, although its regional ranking remains "steady" at third.
“The largest improvements, in terms of scores, are in the categories of infrastructure and market opportunities. Qatar's fairly open foreign investment regime, open trading relationships with regional partners and sophisticated capital markets will remain strong aspects of its business environment. The main shortcomings are in policy towards private enterprise and competition and in access to financing for small and medium-sized enterprises,” the EIU said.
In its latest update, the EIU said "while net external liabilities pose risks, strong prudential indicators insulate (Qatar’s) banks from a deterioration in asset quality arising from the 2020 recession."
"The non-performing loan ratio is low, and profitability levels are moderate," the EIU noted.
Macroeconomic indicators have "improved" since the pandemic-induced slump in 2020, including a "return to positive" global and Qatari economic growth.
“We estimate that the fiscal account will have returned to surplus in 2021 owing to recovering global oil and gas prices, which will ease public debt pressures. Qatar's debt obligations are high, but its ability to fully service them is not in doubt, supported by ample foreign reserves and the assets of the Qatar Investment Authority (QIA), the sovereign wealth fund,” the EIU said.
The "rating is supported by a recovery" in international hydrocarbons prices and an estimated shift from deficit to surplus on the current account in 2021. The Qatari riyal's peg to the dollar will continue to be backed by "healthy" foreign reserves and QIA assets, the EIU said.
That said, the EIU noted Qatar's “overdependence” on hydrocarbons exports leaves it exposed to international price movements. The Qatar National Vision 2030 diversification programme will shape policy. The large stock of public debt weighs on the outlook, but a sound financial system is supportive.
Previously, the EIU noted Qatar's overall business environment score has improved from 6.56 for the historical period (2016 to 2020) to 7.35 for the forecast period (2021 to 2025). This has helped Qatar's global ranking to improve by eight places from 36 to 28, although its regional ranking remains "steady" at third.
“The largest improvements, in terms of scores, are in the categories of infrastructure and market opportunities. Qatar's fairly open foreign investment regime, open trading relationships with regional partners and sophisticated capital markets will remain strong aspects of its business environment. The main shortcomings are in policy towards private enterprise and competition and in access to financing for small and medium-sized enterprises,” the EIU said.
