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 Economist Intelligence Unit (EIU) has said in an economic update.
Qatar's overall business environment score has improved from 6.56 for the historical period (2016-20) to 7.35 for the forecast period (2021-25), the EIU noted.
“This has helped Qatar's global ranking to improve by eight places from 36th to 28th, although its regional ranking remains steady at third. The largest improvements, in terms of scores, are in the categories of infrastructure and market opportunities,” the EIU said.
In its latest overview, the EIU said the lifting in January this year of the blockade on Qatar has considerably lessened economic risk stemming from regional disputes.
The country’s fiscal account will return to surplus in 2021 as a result of recovering global oil prices, easing public debt pressures. Qatar's ability to fully service its large debt obligations remains strong, supported by ample foreign reserves and the assets of the Qatar Investment Authority (QIA, the sovereign wealth fund), the EIU said and assigned BBB rating to the sovereign risk.
According to the EIU, the currency risk is ‘BB-rated’. The rating, it said, is “supported by a recovery in international oil prices and an expected shift from deficit to surplus” on the current account in 2021.
“The Qatari riyal's peg to the US dollar will continue to be backed by healthy foreign reserves and QIA assets,” EIU noted.
Banking sector risk is also BB-rated, the researcher noted.
“The sector is well regulated, and although net external liabilities pose risks, strong prudential indicators insulate banks from a deterioration in asset quality arising from last year's recession. The non-performing loan ratio is low, and profitability levels are moderate,” the EIU said.
The EIU said the economic structure risk is B-rated.
“Qatar's overdependence on hydrocarbons exports leaves it exposed to global price movements. In the short term, policy will continue to focus on addressing the fallout from the pandemic. Qatar's large stock of public debt weighs on the outlook, but a sound financial system is supportive,” the EIU said.
Qatar's overall business environment score has improved from 6.56 for the historical period (2016-20) to 7.35 for the forecast period (2021-25), the EIU noted.
“This has helped Qatar's global ranking to improve by eight places from 36th to 28th, although its regional ranking remains steady at third. The largest improvements, in terms of scores, are in the categories of infrastructure and market opportunities,” the EIU said.
In its latest overview, the EIU said the lifting in January this year of the blockade on Qatar has considerably lessened economic risk stemming from regional disputes.
The country’s fiscal account will return to surplus in 2021 as a result of recovering global oil prices, easing public debt pressures. Qatar's ability to fully service its large debt obligations remains strong, supported by ample foreign reserves and the assets of the Qatar Investment Authority (QIA, the sovereign wealth fund), the EIU said and assigned BBB rating to the sovereign risk.
According to the EIU, the currency risk is ‘BB-rated’. The rating, it said, is “supported by a recovery in international oil prices and an expected shift from deficit to surplus” on the current account in 2021.
“The Qatari riyal's peg to the US dollar will continue to be backed by healthy foreign reserves and QIA assets,” EIU noted.
Banking sector risk is also BB-rated, the researcher noted.
“The sector is well regulated, and although net external liabilities pose risks, strong prudential indicators insulate banks from a deterioration in asset quality arising from last year's recession. The non-performing loan ratio is low, and profitability levels are moderate,” the EIU said.
The EIU said the economic structure risk is B-rated.
“Qatar's overdependence on hydrocarbons exports leaves it exposed to global price movements. In the short term, policy will continue to focus on addressing the fallout from the pandemic. Qatar's large stock of public debt weighs on the outlook, but a sound financial system is supportive,” the EIU said.
