Qatar’s liquid assets are forecast to weather the geopolitical headwinds facing the GCC assuming the Iran war does not extend into the latter half of the year in a new research note by S&P Global.
Qatar Rebound
The agency’s outlook outlines several key points for FY26 to FY27.
Qatar’s large stock of accumulated liquid assets should help it weather the impact of the regional conflict and the supply disruptions it has caused in the Strait of Hormuz.
Qatar’s exports of LNG depend on maritime transit via Hormuz. Prior to the conflict, Qatar’s production capacity reached approximately 78M tonnes annually. Following attacks on Ras Laffan Industrial City in March, QatarEnergy suspended operations.
S&P Global projects average full-year LNG production to remain around 40% below pre-war levels until offsetting the fall in production by FY27.
S&P Global reaffirmed its AA/A-1+ long and short-term foreign and local currency sovereign credit ratings for Qatar, maintaining a stable outlook.
Medium Term Disruption
S&P forecasts that Qatar’s economy will contract by 5% in real terms in FY26, while both fiscal and current account balances move into small deficits.
Differences in Forecasts
However the IMF, during its Spring Meetings in April, forecast a 8.6% contraction in FY26 for the GCC economy.
Economic Variables
Growth forecasts and asset buffers also depend on the duration and intensity of the Iran war.
While reports of damage to GCC infrastructure has subsided, a resumption in hostilities or the extension of the closure of the Strait of Hormuz may negate S&P’s latest research note.
S&P may lower its ratings if the conflict becomes “protracted” leading to a weaker budgetary performance, eroding Qatar’s accumulated asset buffers.
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