Demand remains "high" for "good quality" issuers like Qatar, which is one of the three Gulf countries that will continue to have comfortable fiscal position amid weakening oil prices due to the US tariff uncertainties, according to a top official of Standard Chartered Bank.In a media roundtable on Tuesday, Standard Chartered Bank Middle East and North Africa (Mena) economist Carla Slim said the Middle East region is in a very “unique” position to withstand and weather the storm despite expected "stagflation" in the US and disinflation in Asia."There's very high demand for good quality paper and highly rated economies and issuers like Qatar where investors want to see more issuers in these spaces because they have a lot of liquidity that they want to deploy in high quality markets," she said, adding Doha also wants to diversify its access to liquidity.Highlighting that Qatar's North Field project will significantly increase the gas contribution to the economy; she said that is going to lead to a rebalancing of a lot of macro-implicators in Qatar, all the way from the GDP (gross domestic product) composition to public debt to GDP.Qatar may have seen an economic slowdown post 2022 FIFA, but did not see any retardation year-on-year, which meant that the non-oil economies continue to grow, albeit at a slower pace, given the slower investment growth after the World Cup, she said.A global research report from Standard Chartered last year had forecasted Qatar’s economy to double in size by 2031, aided by its ability to restore government revenues to pre-2014 oil price shock levels.With North Field gas expansion, which was partly helped by the European Union officially endorsing gas as a transition fuel, Slim said there were long term contracts that Qatar has already signed for the expanded capacity, due to come online at the end of the year.Nevertheless, other regional players in hydrocarbons have actually reduced their expansion plans, partly because the Opec agreement has meant that these economies and these countries have been under producing.Highlighting that the Middle East will have "very little" direct impact from the US tariff crisis; she however said oil prices have taken a hit and that's going to have an impact.With oil prices rounding up at $65 for Brent, however she said there are only three GCC economies that continue to have a comfortable fiscal or budget position."These are Qatar, the UAE and Oman. At $65 Qatar, UAE and Oman still have a budget either that is balanced or that has a small surplus so benefits still from a surplus of liquidity from the budget perspective," she said.Finding that the indirect effects – from oil prices to forex risks – are far more consequential; Slim said yet, this environment presents an opportunity for trade rerouting and deeper South–South integration, which could ultimately benefit the GCC’s position as a global trade corridor.Expecting the region to import some stagflation from the US and disinflation from Asia; she however said "we believe that the Middle East is in a very unique position to withstand and weather this storm."Finding that the region would have very little direct hit as a result of the tariff crisis, she said the US already has a trade surplus with many of the Middle Eastern economies, implying that Washington's exports to these regions more than these regions export to the US and this is why many of the countries in the region only got initially the 10% universal rate rather than a higher tariff rate.

Santhosh V. Perumal
Santhosh V. Perumal, a postgraduate in Econometrics with an advance qualification in Capital Markets and Financial Services, is Gulf Times' journalist. His coverage areas are debt and equity, hydrocarbons, international trade, environment, banks, insurance and real estate. Previously, he was in New Delhi, India as Senior Finance Correspondent of PTI.
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