Moody’s Downgrades Qatar Economic Outlook

A ratings agency downgraded Qatar’s economic outlook as a deadline for the country to meet demands imposed by its Persian Gulf Arab neighbors passed on Wednesday. Saudi Arabia and Arab allies that have cut ties with Qatar plan talks in Egypt on the Persian Gulf Arab diplomatic crisis, after Doha said their demands were impossible to meet.

The four Arab nations, which also include the United Arab Emirates, Bahrain and Egypt, accuse Qatar of supporting “extremism”, a charge which it denies. They gave the isolated emirate an extra 48 hours to meet their ultimatum after an initial 10-day deadline passed on Sunday. That extended deadline passed early on Wednesday morning, middleeasteye.net reported.

Early on Wednesday the ratings agency Moody’s said “the likelihood of a prolonged period of uncertainty extending into 2018 has increased and a quick resolution of the dispute is unlikely over the next few months”.

The turmoil “carries the risk that Qatar’s sovereign credit fundamentals could be negatively affected”. It added, however, that Qatar’s exports of natural gas had yet to be affected.

Saudi Arabia said early Wednesday the four had received Qatar’s response and that they would respond “at the right time”.

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani handed an official response on Monday to Kuwait, which is mediating in the dispute, but its contents have not been disclosed.

Doha has said it will not bow to pressure and that the demands seem designed to be rejected. Sheikh Mohammed told a press conference on Tuesday that the list of demands from the four countries “is unrealistic and is not actionable”. “It’s not about terrorism, it’s talking about shutting down the freedom of speech,” he said.

The demands included Doha ending support for the Muslim Brotherhood, closing broadcaster Al-Jazeera, downgrading diplomatic ties with Iran and shutting down a Turkish military base in the emirate.

Riyadh and its supporters have severed air, sea and ground links with Qatar, cutting off vital routes for imports including food. They also ordered Qatari citizens to leave their territories and took various steps against Qatari firms and financial institutions.

Sheikh Mohammed said Doha was looking for a solution to the month-long crisis based on dialogue. “The state of Qatar has adopted a very constructive attitude since the beginning of the crisis. We are trying to act mature and discuss the matter.”

The four countries have suggested further sanctions could be imposed if Doha does not comply. Foreign ministers from the four countries were scheduled to meet later Wednesday in Cairo.