New S&P Report Describes Outlook on Middle East Sovereign Ratings

New S&P Report Describes Outlook on Middle East Sovereign Ratings

S&P's latest report on its Middle East sovereign ratings decribes changes to its ratings and rating outlooks since January 2017. The agency has ratings on 13 Middle Eastern governments. Seven of these are investment grade ratings and six are speculative grade. 

Since January 2017, S&P has downgraded Oman, Qatar and Sharjah. It has changed its outlook on the ratings of Bahrain to negative (from stable) and its outlook on Sharjah to stable (from negative). It has placed Qatar on CreditWatch with negative implications.

Over the last ten years, the average rating assigned to Middle East governments has declined from a little more than BBB+ to a little more than BBB-, with most of this decline occurring since September 2015, when S&P began adjusting its ratings on oil exporters to reflect the decline in oil prices which began in the second half of 2014. 

In addition to summarising the factors behind its current ratings on the 13 governments, the S&P report also contains useful data on GDP growth, current account balances, debt ratios and credit growth. It also shows S&P's esimate of the price of oil that the oil exporters need to balance their budgets.

The report is attached below.

The long-term foreign currency ratings on the 13 Middle East sovereigns are: 

 

Abu Dhabi AA, stable outlook

Bahrain, BB-, negative outlook

Egypt, B-, stable outlook

Iraq, B-, stable outlook

Jordan, BB-, negative outlook

Kuwait, AA, stable outlook

Lebanon, B-, stable outlook

Morocco, BBB-, stable outlook

Oman, BB+, negative outlook

Qatar, AA-, CreditWatch negative

Ras Al Khaimah, A, stable outlook

Saudi Arabia, A-, stable outlook

Sharjah, BBB+, stable outlook.

MENA Sovereign Rating Trends Midyear 2017