Qatar has a strong credit outlook for next year due to its liquefied natural gas (LNG) expansion and improving public finances, according to Standard Chartered.

In its latest MENA Credit Outlook 2024, the bank noted that the Gulf state’s economic growth will continue next year, supported by positive indicators.

During the first nine months of the year, Qatar recorded a fiscal surplus for $11.5 billion, approximately 4.9% of the GDP. 

Contributing to the country’s positive outlook are the country’s efforts to increase LNG production. This is in addition to a decline in government-funded capex following a period of elevated spending in the run-up to the 2022 FIFA World Cup.

The bank estimates that Qatar’s debt-to-GDP should drop further, as the government continues to use sizable fiscal surpluses towards debt repayment.

LNG expansion
Last October, state-owned QatarEnergy started work on the North Field expansion project, which will raise Qatar’s LNG output capacity from 77 million tonnes per annum (mtpa) to 126 mtpa by 2026.

“Qatar’s strategic investments in LNG production and strong fiscal indicators reinforce our positive outlook for the nation’s continued economic growth in 2024,” said Muhannad Mukahall, CEO and Head of Corporate, Commercial and Institutional Banking, Qatar, Standard Chartered.

The report also noted that banks in Qatar are seeing a decline in foreign liabilities following regulatory directives by the central bank and slowing credit growth.

Qatar posted strong economic growth in 2022, driven by the World Cup boom.

Last November, the International Monetary Fund (IMF) said the country’s economic growth has normalised this year and that the trend will continue in the near term.

Medium-term outlook will be favourable, supported by the LNG production expansion and “intensifying reform efforts”, the IMF said.

(Writing by Cleofe Maceda; editing by Seban Scaria)