THE strength of Qatar’s economy has once again been validated. Qatar has ranked sixth globally in economic performance, out of 63 countries that are mostly high-income countries, in The World Competitiveness Yearbook 2020. Qatar has ranked 14 in overall performance globally in the Yearbook.
Qatar high rank is the outcome of proactive steps taken by the government to create supportive environment to support economic growth. Qatari economy is now one of the strongest economies regionally and among the most promising economies at the global level.
Qatar has taken several measures to attract foreign direct investment. Companies that operate in the State of Qatar through Qatar Financial Center enjoy competitive advantages, including a legal environment based on English common law, the right to trade in any foreign currency, 100 percent ownership, 100 percent return on profits and 10 percent corporate tax on local profits.
Despite the challenges facing the global economy, including the spread of the novel coronavirus (COVID-19) pandemic, the State has managed to maintain its high credit ratings with a stable outlook. Moody’s rating agency assigned credit rating Aa3 to Qatar in April with a stable outlook.
In its report, Moody’s said that Qatar’s credit profile reflects the government’s strong balance sheet, vast hydrocarbon reserves and exceptionally high per capita income. These factors provide significant shock-absorption capacity and mitigate the vulnerability of government revenue to temporary declines in oil prices, such as the one caused by the coronavirus pandemic, as well as the economic and financial risks arising from Qatar’s exposure to regional geopolitical tensions.
Moody’s noted that the stable outlook balances fiscal and economic risks stemming from the decline in oil prices with Qatar’s very large fiscal and foreign currency reserve buffers in the form of sovereign wealth fund assets. It added that the stable outlook also takes into account risks associated with the ongoing regional geopolitical tensions, including the diplomatic, economic and financial blockade imposed on the State. The strength of the Qatari economy was also confirmed by the Standard & Poor’s rating agency, which affirmed its long-term outlook for the State of Qatar at stable.
In its report issued in March, the rating agency said that Qatar’s government and external balance sheets currently remain strong and provide a buffer to withstand external shocks. It added that while the prices of hydrocarbons may remain low, the government’s fiscal and external positions will remain stable.
