S&P Affirms Qatar at AA With Stable Outlook on Assets Estimated at 200% of GDP
S&P Global Ratings affirmed Qatar at AA with a stable outlook on 30 October, citing government liquid assets that the agency puts at an estimated 200% of GDP.
For investors in Qatar’s sovereign debt, the verdict is that the state’s balance sheet can carry it through a period of disrupted LNG output that the agency expects to run into 2027. The agency expects fiscal surpluses to return from 2027 as the North Field expansion lifts gas production. In The Edge’s reading, the affirmation rests on assets built before the disruption rather than on this year’s flows: the $420 billion of liquid assets the agency estimates is more than 30 times its projected 2026 deficit.
The agency keeps Qatar at AA and A-1+
The action covers Qatar’s long-term and short-term foreign and local currency ratings, at AA and A-1+. The transfer and convertibility assessment stays at AA+, and the AA senior unsecured rating on Global Sukuk Ventures was affirmed alongside them.
The agency’s reports of 13 March and 1 May had affirmed Qatar at the same levels. The Edge set out the AA rating and its stable outlook on 28 September.
The outlook reflects the agency’s view that accumulated fiscal and external assets will let Qatar “weather a period of security and trade flow disruptions”. Its base case assumes that damage to civilian and energy infrastructure stays limited, and that regional disruption runs into 2027.
The scorecard gives Qatar the strongest score, 1, for its economy and for both fiscal measures, and 3 for its external position. Together with the other scores, that yields an indicative rating of aa-, lifted one notch to AA because the government is in a net asset position, with liquid assets of more than 100% of GDP.
The institutional and monetary assessments score 4 on the six-point scale. The agency cites gaps in the availability and timeliness of data, and the limits that the dollar peg places on monetary policy.
A downgrade could follow if the conflict seriously threatened gas production or exports, through significant risks of further damage to key gas production facilities or a long effective blockage of the Strait of Hormuz. Significant unchecked capital outflows from the financial system are the other route. An upgrade would need a durable fall in external financing needs and better data on the government’s external assets.
Liquid assets far exceed a deficit of 6% of GDP
The agency forecasts a general government deficit of 6.0% of GDP in 2026, after 1.2% in 2025. It sees government revenue at $44 billion this year, against $60 billion in 2025. That is a fall of more than a quarter.
Spending has already adjusted. Central government expenditure was 95 billion riyals in the first half, 14% less than a year earlier, mainly through cuts to capital spending. The first-half central government deficit was 31.5 billion riyals, or $8.7 billion.
The report points to a record of restraint under stress, shown in the table below.
Spending restraint in past shocks (in %)
| Episode | Reduction |
|---|---|
| 2014 | 6 |
| 2015 | 15 |
| 2017 | 8 |
| Pandemic | 12 |
| First half 2026 | 14 |
Spending reductions in each episode as stated in the agency’s report; the first half of 2026 is central government expenditure against the first half of 2025.
Debt starts low. General government debt, including borrowing by the Qatar Investment Authority, was an estimated 50% of GDP at the end of June on the agency’s figures, down from 77% in 2020.
Central government debt alone was an estimated 44%, the agency says, against 72% in 2020. In the 2026 forecast, liquid assets are 200.3% of GDP and debt is 52.0%. Assets are therefore 3.9 times debt.
The government raised an estimated $6 billion under its global medium-term note programme in March and September, the report says. Its biggest external debt maturity, $3.5 billion, was repaid on time and in full in June.
Interest takes 8.8% of revenue in 2026 in the forecast table. That share falls to 4.9% in 2027 as revenue recovers and debt is reduced.
The agency’s base case for Qatar (in %)
| Measure | 2025 | 2026 | 2027 |
|---|---|---|---|
| Real GDP growth | 1.8 | -14.4 | 15.1 |
| Fiscal balance | -1.2 | -6.0 | 4.6 |
| Current account | 14.8 | 4.7 | 15.7 |
| Government debt | 49.0 | 52.0 | 50.3 |
| Liquid assets | 192.6 | 200.3 | 192.7 |
Fiscal balance, current account, debt and liquid assets are shares of GDP for the general government or the economy; real GDP growth is the annual change. 2026 and 2027 are base-case forecasts.
The agency sees growth of 15.1% in 2027 as North Field capacity comes on
The disruption is concentrated in gas. Attacks on 19 March damaged two LNG trains at Ras Laffan Industrial City, affecting 12.8 million tonnes a year of production. QatarEnergy expects repairs to take two to three years.
The agency expects 2026 LNG output to average 45% to 50% below pre-war levels. Pre-war capacity was an estimated 78 million tonnes a year, according to the report.
It therefore forecasts a 14.4% contraction in real GDP this year. In the first half the economy was 11% smaller than a year earlier, as the hydrocarbon sector shrank 38%.
The rest of the economy kept growing. The nonhydrocarbon sector, an estimated 65% of real GDP on the agency’s figures, grew 3% in the first half, led by services such as finance, education and public administration.
Growth is forecast to rebound to 15.1% in 2027. It then runs at 8.8% in 2028 and 7.9% in 2029 as new gas production comes online.
The government plans to raise LNG capacity to 142 million tonnes a year by 2030. That is almost 85% above the 77 million the agency gives as current capacity. The agency understands that the attacks did not damage the planned North Field Expansion infrastructure, and that first production from its first phase is planned by mid-2027 despite some delays, barring further hostilities that cause significant material damage.
Abroad, the Golden Pass LNG terminal in the US, whose capacity of 18 million tonnes a year The Edge set out on 27 September, shipped its first export cargo on 23 April. QatarEnergy Trading will take 70% of that capacity, or 12.6 million tonnes a year. The agency expects the terminal to offset an estimated 6 million tonnes of lost domestic volume in 2026.
The current account surplus is forecast to narrow to 4.7% of GDP in 2026, from 14.8%. It then averages an estimated 21% over 2027 to 2029 in the base case, once export constraints ease.
Usable reserves still rise in the forecast, to $33.8 billion in 2026 from $27.5 billion. That is a gain of 22.8%.
The agency judges banks’ funding risk manageable
Qatari banks had net external debt of an estimated $116 billion at the end of August, equal to an estimated 32% of domestic lending, the agency says. An estimated 52% of their external debt is nonresident deposits and interbank funding, which the report treats as vulnerable to a spike in risk perception.
The agency describes the outflow between February and the end of August as relatively limited, at an estimated $2 billion. Nonresident deposits fell $2.8 billion over the period, a decline that a $3.67 billion rise in public sector deposits more than offset.
The stress case assumes outflows of 50% of external bank funding and 30% of nonbank funding. Banks would then need $3 billion to $5 billion of liquidity support, a sum the agency judges commensurate with past government support.
Among the support measures announced in March, the Qatar Central Bank cut the reserve requirement on deposits to 3.5% from 4.5%. Banks’ required reserves at the central bank fell 11.8 billion riyals between February and the end of August, to 40.9 billion riyals.
Nonperforming assets at the top eight banks were 3.7% at 30 June. The agency expects them to rise only slightly, to above 4%.
The agency expects the riyal’s peg to the dollar to remain, backed by large foreign reserves and government assets. The central bank’s gross foreign exchange reserves were $60.6 billion at the end of August, the report notes, excluding foreign currency liquidity of an estimated $11.5 billion.
Consumer price inflation is forecast at 4.0% in 2026, then 3.0% a year through 2029.
Figures are from S&P Global Ratings’ research update on Qatar dated 30 October 2026, including its base-case forecasts for 2026 to 2029; percentages, ratios and comparisons not attributed to a source are The Edge’s calculations.
Sources: S&P Global Ratings, The Edge.
