QATAR

RISK RATING
Low
Default High Risk Score 1.80
Normal Average 1.48
Weighted Average 1.40
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

Qatar wields disproportionate influence in the Middle East and beyond due to its wealth from liquefied natural gas (LNG) and alleged support of armed groups. A January 2021 GCC agreement ended the three-year old blockade of Qatar by Saudi Arabia, the UAE, Bahrain, and Egypt. However, the resolution agreement remains fragile and the longer-term impact of the crisis in terms of regional resentment and animosity is likely to take longer to heal. Despite the GCC agreement, Qatar will continue to strengthen relations with Iran and Turkey. Qatar is one of the few Arab countries that supports Turkey’s intervention in Libya. Qatar is the world’s top exporter of LNG and is trying to diversify its economy by boosting foreign investment in non-hydrocarbon sectors.

  • The Al Thani dynasty has been ruling Qatar since the family house was established in 1825. The current ruler, Emir Sheikh Tamim bin Hamad al-Thani, has the exclusive power to appoint and remove the prime minister and cabinet ministers who, together, constitute the Council of Ministers, which is the supreme executive authority in the country. Qatar is therefore governed as both a constitutional and absolute monarchy. The government is currently focussed on expanding the country’s infrastructure in preparation for the hosting of the 2022 FIFA World Cup. There are serious reputational risks in the financial sector as the government has been accused of supporting Islamist terror groups in the Middle East, Africa, and elsewhere.
  • A January 2021 GCC deal ended an air, land, and sea blockade that was imposed in 2017 on Qatar by four Arab countries – Saudi Arabia, Egypt, the UAE, and Bahrain. The blocking states cut diplomatic and trade ties with Qatar, claiming that it supported Islamist armed groups and that its ties with Iran were too close. The quartet of Arab states called for the downgrading of diplomatic ties with Iran, ceasing military cooperation with Turkey, and shutting down media company Al Jazeera. The 2021 GCC agreement has mitigated the risk of regional military action against Qatar, although tensions will remain. In response, Qatar’s plans to transform and significantly enlarge its armed forces have accelerated. The country has become one of the largest arms importers in the world.
  • Qatar’s food security is a major concern, and the government has signed agreements to increase its strategic food stuff reserves. Qatar, the world’s top exporter of LNG, is trying to diversify its economy by boosting tourism and foreign investment in non-hydrocarbon sectors. As part of this plan, Qatar will allow foreign companies and individuals to own real estate in more areas in the country, liberalising rules to attract overseas funds in the sector. Low demand for LNG and the collapse of the tourism sector under the 2017-2021 Arab blockade and pandemic resulted in an economic contraction of 4.3 percent in 2020, although the economy is set to recover in 2021. This outlook is positive for debt sustainability – Qatar’s international reserves are expected to total USD 37.6 billion by 2024.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
1.0
Expropriation, Nationalisation, Confiscation & Deprivation
1.8
Contract Frustration & Breach
1.8
Taxation
1.8
Bribery & Corruption
1.8
Regulatory Burden
1.5
Strikes, Riots & Civil Commotion
0.8
Security
1.5
Sovereign Default
1.0
Economic Volatiliy
1.8

Risk Rating Scale (small)

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