Qatar’s credit rating from Fitch has just  been upgraded, surpassing those of major economies like the UK and France.

Fitch Ratings said on Wednesday it has assigned a long-term foreign-currency issuer default rating (IDR) of "AA" to Qatar, an improvement from the previous “AA-“. 

Both the UK and France currently have an AA- credit rating.

Qatar’s credit rating upgrade reflects Fitch’s greater confidence that debt to GDP will remain in line with or below the “AA” peer median, after falling sharply in recent years, the ratings agency said in a statement on Wednesday.

It noted that Qatar's already strong external balance sheet is forecast to strengthen, while budget surpluses are likely to be retained until the 2030s, as a result of the North Field expansion project.

The country’s general government budget surplus is expected to reach 8.6% of GDP this year and 6.2% in 2025, Fitch noted.

“Qatar’s ‘AA’ ratings are supported by large sovereign net foreign assets (SNFA), one of the world’s highest ratios of GDP per capita and a flexible public finance structure,” Fitch said.

However, Fitch said rating weaknesses include the country’s heavy reliance on hydrocarbon and below-average scores on some measures of governance, higher government debt/GDP than oil-dependent highly rated peers and substantial contingent liabilities.

(Writing by Cleofe Maceda; editing by Seban Scaria)