Qatar may cut capital spending because of sanctions: Fitch

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The skyline of Doha, Qatar.

Qatar’s government may reduce its capital spending on economic projects and infrastructure if damage to its economy from sanctions intensifies, Fitch Ratings said on Monday as it cut the country’s credit rating.

Fitch lowered Qatar by one notch to AA-minus with a negative outlook. That brought it into line with the other two major rating agencies, Moody’s and Standard & Poor’s, which assess Qatar at the same level and also have negative outlooks for it.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut ties with Qatar on June 5, accusing it of backing terrorism, which it denies. They imposed sanctions closing Qatar’s only land border, with Saudi Arabia, and disrupted its maritime shipping routes by ending its use of Dubai as a trans-shipment hub.

Fitch noted that even before the sanctions, Qatar had shrunk its capital spending plans for 2014-2024 to $130 billion from $180 billion in response to low oil and gas prices.