Fitch affirms Qatar’s AA rating, forecasts 18.8% GDP contraction in 2026

Fitch Ratings on Friday affirmed Qatar's long-term credit rating at 'AA' and removed the Gulf state from Rating Watch Negative, but assigned a negative outlook as the ongoing disruption to liquefied natural gas exports through the Strait of Hormuz continues to weigh on the country's economic prospects.ua+1

The rating agency forecasts Qatar's economy will contract by 18.8% in 2026, driven by the near-total shutdown of LNG exports since the U.S.-Iran conflict disrupted shipping through the strait earlier this year. Fitch expects the fiscal deficit to widen to 2.7% of GDP, or 7.1% excluding estimated investment income from the Qatar Investment Authority's external assets.dmarketforces+1

From Watch Negative to Negative Outlook

Fitch had placed Qatar on Rating Watch Negative in March after Iranian strikes damaged facilities at Ras Laffan, knocking out an estimated 17% of capacity. The removal from watch status reflects the agency's view that the risk of further severe damage has diminished since then, though it said the full impact of the war on Qatar's credit profile "will take longer to discern".fitchratings+2

The negative outlook captures the possibility that the period in which Qatar cannot export LNG could be further prolonged. Fitch assumes "some form of deal will enable conditions conducive to the resumption of exports through the Strait in 1Q27," after which it estimates six months to reach pre-war production levels minus the damaged capacity.dmarketforces

Rebound Expected but Contingent on Strait Access

Despite the immediate economic pain, Fitch anticipates a sharp rebound once LNG flows normalize and the first phase of the North Field expansion comes online. The agency said the war has had only a small impact on the expansion project, with a substantial increase in production capacity set to begin in 2027. Double-digit growth is projected for 2028 as output continues to ramp up.dmarketforces

Qatar's sovereign net foreign assets remain a buffer, projected at 254.2% of GDP at end-2026. The opening of the Golden Pass LNG facility in the United States, 70% owned by QatarEnergy, and higher profits from QatarEnergy's trading operations are expected to partly offset the revenue losses.investing+1

Broader Market Implications

The disruption has reshaped global energy markets. Reuters reported in August that Qatar has lost an estimated $24 billion in gas sales over roughly five months of stranded exports. Shell ↗ 0.69% projected in June that global LNG trade could remain flat in 2026 if strait flows return to normal within three months, with growth resuming in 2027.gcaptain+1

Fitch expects Qatar's current account to post a rare deficit of 4.6% of GDP this year before returning to a near-double-digit surplus in 2028 as energy exports recover.dmarketforces