Fitch affirms Qatar at AA, but negative outlook holds on war uncertainty

Fitch Ratings affirmed Qatar’s sovereign rating at AA and removed it from Rating Watch Negative, citing reduced risk to LNG facilities since the March attack on Ras Laffan. The outlook remains negative as “the impact of the war on the credit profile will take longer to discern.”

Fitch’s base case: Qatar’s economy contracts 18.8% in 2026, rebounding next year as LNG exports resume and North Field expansion — largely undamaged by the war — ramps production from 2027.

But the restart timeline assumes a US-Iran deal reopens the Strait of Hormuz to exports in 1Q 2027, taking roughly six months to reach pre-war volumes, minus the 17% of capacity still offline from the Ras Laffan strike through 2028. That’s a diplomatic assumption, and the reason why the outlook stays negative.

The fiscal math: Fitch forecasts a 2026 deficit of 2.7% of GDP, funded mainly through debt and the offshore fiscal stabilisation fund, with Qatar Investment Authority (QIA) drawdowns playing only a minor role. Debt is projected to hit 64.1% of GDP by end-2026, up from 51.3% a year earlier. Golden Pass LNG’s US ramp-up (70% QatarEnergy-owned) and higher energy-trading profits partly offset the hit.

The damage already shows: GDP contracted 7% y-o-y in 1Q 2026, hydrocarbon GDP down 25.8% against 3.5% non-hydrocarbon growth, per the National Planning Council. Qatar shipped 18 LNG cargoes in the war’s first six months, versus 509 a year earlier — a 96% decline, according to ICIS data cited by Reuters.