Signs are beginning to show that Qatar is suffering under the isolation imposed by its Gulf neighbours, as Moody's has changed the outlook on Qatar's rating from stable to negative.
Moody's stopped short of downgrading the country's rating, reaffirming the long-term issuer and senior unsecured debt ratings at Aa3.
However, the negative outlook implies that this score – which defines Qatar's credit as high quality with a very low credit risk – could soon be on the decline.
Moody's said in a statement:
The rating affirmation at Aa3 takes into account a number of credit strengths embedded in Qatar's credit profile, and reflects Moody's view that the sizeable net asset position of the Qatari government and exceptionally high levels of wealth will continue to provide significant support to the sovereign credit profile for the time being.
The country owns property in London such as the Chelsea Barracks site, the Olympic Village, the Shard and Canary Wharf.
Moody's is hesitantly following the lead of fellow agency Standard & Poor, which downgraded its long-term credit rating for Qatar by a notch last month.
The ratings agency was motivated to change its outlook on Qatar due to the severing of diplomatic relations between Qatar and a number of other nearby countries.
Its fellow members of the Gulf Cooperation Council, including Saudi Arabia, the United Arab Emirates and Bahrain, as well as other Arab nations such as Egypt, submitted a list of 13 demands to Qatar last month.
These included closing down news network Al Jazeera, which Qatar's neighbours accuse of being a mouthpiece for terrorist organisations, snipping diplomatic ties with Iran, and stopping all contacts with political opposition parties in other Gulf countries.
Moody's has said it expects “the stalemate may continue for some time”, and added: “Depending on the duration and potential further escalation of tensions, the dispute could negatively affect Qatar's economic and fiscal strength.”
The Qatari foreign minister, Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, is due to present Qatar's response to the demands at Chatham House this afternoon.