Moody's boosts five Gulf countries

Moody's Investors Service said it upgraded the long-term foreign and domestic currency government bond ratings and the country ceilings for long-term foreign currency bank deposits of five Gulf countries to reflect the significant ongoing strengthening of their public and external finances.

The governments affected are Bahrain (upgraded to A2 with stable outlook from A3), Kuwait (upgraded to Aa2 with stable outlook from Aa3), Oman (upgraded to A2 with stable outlook from A3), Qatar (upgraded to Aa2 with stable outlook from Aa3) and Saudi Arabia (upgraded to A1 with positive outlook from A2), the agency said.

The country ceilings for long-term foreign currency bonds have been upgraded in the case of Bahrain (upgraded to Aa3 with stable outlook from A1) and Oman (upgraded to Aa3 with stable outlook from A1). The country ceilings for short-term foreign currency bank deposits were upgraded in the case of Bahrain (to P-1 from P-2) and Oman (to P-1 from P-2), Moody's noted.

"The marked improvement in the economic fundamentals of the Gulf countries has mainly been caused by the sustained rise in global hydrocarbon prices over the past five years. However, we have also been encouraged by the relatively prudent use of oil export receipts compared with previous oil booms," said Tristan Cooper, a vice president at Moody's London office.

Cooper said that a higher proportion of these receipts has been saved than previously and that there has been a healthy bias towards more productive capital than current spending, although the pace of overall government expenditure is growing rapidly in nominal terms and has accelerated across the GCC as a whole over the past three years.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.