Fitch: No impact on Middle East sovereigns

Fitch Ratings said in a new report that the global financial crisis has had a relatively muted impact on Middle East sovereign creditworthiness overall.

The outlook on all of the region's sovereign ratings remain stable.

Median GDP growth slowed to 3% in 2009 from 4.5% in 2008 and will rise to 4% this year.

The large oil producers - Abu Dhabi (AA ratings), Kuwait (AA ratings), Libya (BBB+ ratings) and Saudi Arabia (AA- ratings) - were hardest hit as oil prices and production fell sharply, Fitch said.

Non-oil exporters, on the other hand, fared much better than expected, especially given their strong trade links with Europe, the agency said.

Among non-oil producers, Egypt's (BB+ ratings) growth of 4.7% in 2009 and 5.3% in the year to June showed its increased resilience after recent reforms, Fitch said.

Morocco (BBB- ratings) and Tunisia (BBB ratings) approached the crisis with a manageable debt burden, also leaving room for fiscal stimulus. However, desired economic growth will be harder to achieve with European Union trading partners growing slowly, the agency said.

Lebanon (B ratings) fared extremely well, with its banks attracting strong non-resident deposit inflows, triggering a virtuous circle of rising reserves, improved confidence, strong growth, and improved debt dynamics, explaining the rating upgrade in February, the agency said.

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