The Qatari economy is doing well; it had overcome the bottleneck in 2001, and advanced since then to more prosperity and growth. While the official data of Qatar have assured this fact rather clearly, the international appraisal and ratings institutions including Standard & Poor’s have confirmed these figures, and placed Qatar in one of the front lines of the internationally recognized rate i.e. “A+”. It is worthy to note that “Standard & Poor’s” has upraised Qatar’s rate two times during the past few years from “Ba2” to “A-“ and then to “A+” in 2003. Credit ratings for Qatar has been maintained by S & P at “A+/positive” in the year 2004.
“Standard & Poor’s” has granted the “A” rate in 2004 to countries that fulfilled certain preliminary prerequisites, these include:
1. The annual per capita income averaged $13338 in the “A” group of countries, and the average in Qatar was much higher and stood at $30595 in 2003.
2. The actual rate of growth in the “A” group of countries accomplished 3.8% in average, while it was 8.4% in Qatar in 2003.
3. The deficit of the public budget to GDP ratio, reached 0.8% in average of the “A” group of countries, whereas the public budget of Qatar was in surplus of 8.1% of the GDP in the year 2003/2004.
4. The government debt to GDP ratio was 44.6% in the average of “A” group of countries and 55.1% in Qatar. Although it was much worse in Qatar than the group, it has improved in the past few years and is expected by Standard & Poor’s to reach 34.6% by 2007.
5. The public sector’s foreign debt percentages compared to current account incomings were 14.3% in “A” group of countries (the public sector in these countries are net creditors). The public sector’s foreign debt percentage in Qatar was at 26.2% in 2003. Nevertheless, two factors combined to diminish the consequences: first: the Qatar public sector’s debts are linked to export revenues and are not state-guaranteed. Second: debts are decreasing, they reached an average of 43% in the period 2000-2004e and Standard & Poor’s anticipates more decreases to minus 5.1% in 2006.
6. The ratio of banking system’s foreign-debts to current account incomings were negative at 1.9 % for “A” group of countries, whereas in Qatar the same was a negative of 26% in the year 2003, this percentage is expected to decrease even further to –34.2% in 2006. This high negative percentage reveals clearly that the banking system foreign-assets’ are positive and considerably convenient. The situation was quite the contrary in the second half of the nineties.
7. The inflation rates reached 2.1% in the countries group of “A” in the year 2003, while it was 2.3 in Qatar and the average was a sheer 1.7% during the period 2000-2004e.
Although Qatar’s fundamentals have qualified it to attain a high rate, “Standard & Poor’s” has expected an even better rate for Qatar in the near future. To achieve this objective, the S & P has stipulated development of capital markets, reduction of public debt, greater integrity in public financial-administration, and reinforcement of political institutions. We believe the State of Qatar is capable of meeting these requirements in the next few years.