S&P Global Ratings projected the aggregate long-term sovereign borrowing from commercial sources by the 13 rated countries in the Middle East & North Africa (MENA) region at $135.7bn in 2019, which would constitute an increase of 24.7% from $108.8bn in 2018. It attributed the increase to lower oil prices, which will not help the Gulf Cooperation Council (GCC) countries reduce their fiscal deficits. Saudi Arabia would account for 21.6% total commercial long-term borrowing in 2019 compared to 27.2% last year, followed by Egypt (20.4%), Lebanon (14%) and Kuwait (11.3%). S&P said that $60bn, or 44.1% of total sovereign borrowing, would refinance maturing long-term debt, which would result in net borrowing requirements of $76bn in 2019. In parallel, S&P forecast the total sovereign commercial debt stock of the 13 countries, when excluding bilateral and multilateral debt, at $891.6bn at the end of 2019 relative to $806.1bn at end-2018, consisting of $723bn in medium- and long-term debt and $169bn in short-term debt. Egypt would account for 25.6% of the commercial debt stock, followed by Saudi Arabia (19.5%), Qatar (10.7%), Lebanon (10%) and Iraq (8.9%). Further, gross long-term sovereign commercial borrowing would be equivalent to 6.1% of the aggregate GDP of the 13 economies in 2019, while the total sovereign debt stock from commercial sources would be equivalent to 40.1% of their GDP at end-2019.
Source: S&P Global Ratings