S&P Global Ratings on June 7 lowered Qatar's long-term rating to AA- from AA and placed it on CreditWatch with negative implications amid a diplomatic row with several Arab states.
Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Libya and Yemen on June 5 moved to cut diplomatic ties with Qatar, as well as trade and transport links, amid allegations that Qatar is financing terrorist activity. Qatar, which has apparently taken a more conciliatory stance toward Iran, has denied these allegations.
According to S&P, Qatar's reduced regional trade could slow its economic growth and widen its fiscal and current account deficits. Meanwhile, corporate profitability is expected to take a hit because of regional demand being cut off, and investment confidence is projected to wane.
S&P said it could further downgrade Qatar if the government debt increases significantly faster than expected or if the Arab nations or other trade partners impose more severe restrictions on Doha, among other possibilities.
Meanwhile, U.S. President Donald Trump offered to help resolve the crisis, including through a meeting at the White House, if necessary.
Separately, UAE Minister of State for Foreign Affairs Anwar Gargash told Reuters that there could be more economic restrictions on Qatar.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.