DOHA: Qatar's economy is weathering the global downturn well, and is one of the fastest growing economies in 2009.
The country's real GDP is expected to expand by 13 percent triggering positive repercussions on Qatar's fiscal and external accounts, providing abundant revenues and export receipts as early as the fourth quarter of 2009, forecast an annual GCC credit survey.
The Standard & Poor's fourth annual GCC survey has assigned an 'A' rating to Qtel International Finance Limited's $1.5bn global medium-term note programme, which is guaranteed by parent company Qatar Telecom (Qtel).
The rating on Qtel are supported by the group's dominant market position and strong cash flow generation in fixed-line and mobile telephony in the Qatari telecoms market, despite upcoming competition in 2009 from Vodafone Qatar.
"We expect incremental population growth in Qatar to drive demand for telecoms services while competition is introduced", the report said.
On the rating of Qatar's Insurance sector, the report said the Qatar Insurance Company (QIC) has maintained its dominant domestic position with about a 50 percent share of the Qatari market.
The Sovereign Wealth Funds (SWFs) across the region, particularly in Qatar, Abu Dhabi and Kuwait, have seen significantly negative returns on their sizeable foreign asset holdings over the past 18 months.
While still very strong, the surveys consider that the implied reduction in government net asset positions is nonetheless an erosion of one of the key credit strengths for these sovereigns.
In Qatar, an 'AA-' rating has been assigned to the $3bn global bond issue by the State.
"The senior fixed rate notes have two tranches: a five year $2 bn bond maturing April 9, 2014, and a 10-year $1bn bond maturing April 9, 2019. The rating is in line with Qatar's 'AA' long-term foreign currency issuer credit rating", the credit survey said.
The ratings on Qatar are supported primarily by strong fiscal and external balance-sheets, healthy economic prospects driven largely by the gas industry, and high per capita income.
The continuous investments in the liquefied natural gas (LNG) industry will raise production to 77.4 million tonnes per year by 2012 against 31 million tonnes in 2008 and boost export receipts.
The survey said Qatar has accumulated substantial domestic and foreign assets over the past decade. These assets are the product of Qatar's high resource endowment, long-term investment planning, and prudent fiscal polices.
"We forecast that the government's general net asset position will stand at a comfortable 40 percent of GDP at year end 2009. the pace of future asset accumulation will depend on the evolution of hydrocarbon production and prices, as oil and gas revenues account for 62 percent of GDP, 85 percent of government revenues, and almost 90 percent of export receipts", the report said.
The annual survey has showcased the latest research and analysis on more than hundred corporate issuers, banks, insurers, utilities, project finance transactions and sovereigns rated by Standard & Poor's across the GCC.
By Satish Kanady
© The Peninsula 2009
