An oil refinery on the outskirts of Doha (file)
Trade credit risk of the country – a measure of private sector repayment risk – is “very low” by regional standards at 3.0 (determined by Oxford Economics under its data-driven methodology) compared with the regional average of 6.1.
“The main factors underpinning this rating are Qatar’s macroeconomic stability, the credible and well-established exchange rate regime, robust growth, extremely high GDP per capita, and a healthy, well-developed banking sector.
Although the country’s external debt burden became large due to heavy investment in a relatively short period of time, and trended up between 2013 and 2021, it has since declined,” the researcher noted.
Debt is balanced by the large but undeclared foreign assets (including over $40bn of official reserves), current account surpluses, sustained economic growth, and access to cheap external borrowing due to Qatar’s high sovereign credit ratings.
The country’s large external surpluses have been invested abroad in property, financial, retail and other sectors by the Qatar Investment Authority (QIA), which is estimated by the Sovereign Wealth Fund Institute to have assets of more than $500bn. The aim is to reduce the state’s reliance on oil and gas earnings.
According to Oxford Economics, Qatar’s crude oil production will rise modestly this year and next.
“Qatar isn’t involved in the Opec+ pact on production quotas and its oil output has been relatively flat in recent years, at around 600,000 barrels per day.
“We think growth in the energy sector will remain modest this year, following a 0.6% expansion in 2024, before picking up strongly in 2026-2027,” Oxford Economics said and noted the “gas sector is a priority.”
Last year, the authorities doubled down on the North Field gas expansion project, which will have a positive medium-term impact. Qatar raised its liquefied natural gas capacity target to 142mn tonnes per year (mtpy) by end-2030.
This is up nearly 85% from the current 77 mtpy, and up 13% on the intermediate target of 126 mtpy by 2027.
The first production boost will come from the North Field East project by mid-2026, followed by the North Field South phase of the expansion.
The North Field West phase is in its early stages, with construction likely to begin in 2027.
Qatar is also making progress in contracting future gas output. The government has signed long-term supply contracts with India, China, France, Germany, Hungary, Kuwait, and Taiwan, the researcher noted.
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