Qatar's debt/GDP (gross domestic product) ratio is expected to significantly decline and the subsequent debt path will depend on how the government chooses to deploy its fiscal surpluses, according to Fitch, a global credit rating agency.
"We project debt/GDP to fall to about 45% of GDP in 2023 and 42% in 2024, from a peak at 85% in 2020. This reflects our expectation that the government will continue to repay maturing external debt in 2023 ($7.5bn) and 2024 ($4.8bn) and to gradually pay down some of its domestic debt" it said in a report.
Large surpluses would still allow Qatar to transfer new funds to the Qatar Investment Authority, it said.
Fitch said the subsequent debt path would depend on how the government chooses to deploy its fiscal surpluses.
"The persistence of a high global bond yield environment could encourage Qatar to continue to allocate a share of its surpluses to deleveraging beyond 2024, although our baseline assumes that external debt is rolled over," it said. The country's debt metrics include government overdrafts with local banks (QR61bn at end-2022), which the sovereign does not include in its headline figure.
The rating agency estimates that Qatar's economy-wide net external debt position declined to13% of GDP at end-2022, reflecting the rise in nominal GDP and the reduction in banks' foreign liabilities, from about 30% at end-2021.
Fitch estimates the debt of non-bank government-related entities (GRE) at over 40% of GDP. The biggest GRE borrowers are Qatar Airways, QatarEnergy and Ooredoo, together accounting for over a third of Qatar's GRE debt.
Qatar Airways posted a profit in the financial year ending March 2022 (FY22) after receiving a $3bn equity injection from its shareholder (the Qatar Investment Authority) in FY21.