S&P Global affirmed Qatar’s AA/A-1+ long and short-term foreign and local currency sovereign credit ratings with a stable outlook on May 3, 2026, according to the rating agency’s latest report. The affirmation is conditional on the Iran war not persisting into the second half of 2026 and disruption around the Strait of Hormuz remaining temporary, with regional security gradually normalizing.
LNG Production and Trade Impact
More than 90 percent of Qatar’s exports pass through the Strait of Hormuz. Pre-war LNG production capacity was approximately 78 million tons per year, but state-backed QatarEnergy suspended production following attacks on Ras Laffan Industrial City in March. S&P forecasts average full-year 2026 LNG production to remain about 40 percent below pre-war levels, although the agency expects gradual production resumption in the second half of 2026.
Supply from the Golden Pass LNG project in the US and planned LNG expansion in Qatar’s North Field is expected to compensate for the shortfall from 2027 onward.
Economic Projections
Qatar’s economy is forecast to contract by 5 percent in real terms in 2026, following 2.9 percent growth in 2025, according to S&P. Both fiscal and current account balances are expected to move into small deficits due to disruptions from the Middle East war and its impact on LNG production capacity.
S&P forecasts the fiscal deficit will widen to approximately 2 percent of GDP in 2026 from 1.2 percent in 2025. Government revenue is projected to decline to 23 percent of GDP, or $55 billion, in 2026 from 28 percent (around $60 billion) in 2025.
Real GDP growth is forecast to average 4.8 percent in 2027-2029, supported by ongoing LNG production expansion. The government’s economic diversification efforts and reconstruction of damaged LNG infrastructure are expected to support growth in the non-hydrocarbon sector over the next two to three years, S&P said.
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