According to Bloomberg, Fitch lowered the Gulf state’s sovereign long-term debt rating by one notch, putting it on par with Belgium and South Korea. The outlook is negative, the New York-based firm said in a statement Monday.
“International mediation efforts are still ongoing but are not showing significant progress,” Fitch analysts Krisjanis Krustins and Jan Friederich said. “In our view, the negotiating positions of Qatar and the boycotting countries remain far apart.”
Qatar’s foreign deposits fell almost 8 percent in July, according to central bank figures, and the nation is telling its banks to go to international investors for funding instead of relying on the state, according to people familiar with the matter. Qatar is spending billions of dollars preparing to host the soccer World Cup and turn Doha, the capital, into a regional hub.
Fitch estimates the pace of fiscal consolidation will slow as the government bears some of the increased cost of imports and postpones certain non-oil revenue measures in a bid to support economic activity and sentiment.