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S&P Global Ratings publishes MENA Sovereign Rating trends for midyear 2018

July 2018

July 17, 2018 | 13:30 | Dubai – (S&P Global Ratings) Overall sovereign creditworthiness in the Middle East and North Africa (MENA) region has broadly stabilized since January, S&P Global Ratings said in a report published today, “Middle East And North Africa Sovereign Rating Trends Midyear 2018.” Twice a year, we publish a MENA sovereign ratings outlook, which includes rating and outlook trends as well as sovereign-specific summaries. The previous outlook, “Middle East and North Africa Sovereign Rating Trends 2018,” was published on Jan. 10, 2018. Since our January 2018 publication, we have raised the ratings on Egypt to ‘B’, premised on improving macroeconomic fundamentals. Seven of the 13 MENA sovereigns we rate are investment grade. Bahrain, Egypt, Iraq, Jordan, Lebanon, and Oman are speculative grade. Following the re-imposition of sanctions against Iran by the U.S., we do not expect serious repercussions for MENA due to the relatively limited financial and trade ties between Iran and the rest of the region. Under our base case, we also do not expect any significant heightening of the risk of direct conflict between Iran and its neighbour’s. S&P Global Ratings rates seven of the 13 sovereigns in MENA in the ‘BBB’ rating category or above. The average MENA sovereign rating has broadly stabilized at close to ‘BBB-‘, although the GDP-weighted average is closer to ‘BBB’. The gap between the weighted and unweighted average ratings has widened again due to the rebound in oil prices, which is likely to support the GDP of the oil-exporting Gulf Cooperation Council (GCC) sovereigns.

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