Sunday 14, January 2018 by Jessica Combes

Middle East and North Africa sovereign rating trends 2018


Overall sovereign creditworthiness in the Middle East and North Africa (MENA) region has continued to deteriorate since S&P published Middle East and North Africa Sovereign Rating Trends Midyear 2017, on 12 July 2017.

Since the July 2017 publication, the rating’s agency has lowered the ratings on Bahrain, Jordan, and Oman, mainly based on increased external vulnerabilities and rising government debt burdens, and of the 13 rated MENA sovereigns, seven are rated as investment grade. Bahrain, Egypt, Iraq, Jordan, Lebanon, and Oman have speculative-grade ratings.

S&P Global Ratings rates seven of the 13 MENA sovereigns in the 'BBB' rating category or above. The average MENA sovereign rating has been trending downward toward 'BBB-', although the GDP-weighted average is closer to 'BBB'. The gap between the weighted and unweighted average ratings narrowed in 2015; the sharp fall in oil prices had a significant impact on the GDP of the oil-exporting Gulf Cooperation Council (GCC) sovereigns in that year. Since the regional publication in July 2017, S&P has revised its outlook on Egypt to positive from stable.

The agency also affirmed its ratings on Qatar and removed it from CreditWatch with negative implications, where it was placed in June 2017.


Features & Analyses