Riyadh – The negative consequences on Qatar’s economy have been observed over the past few hours due to the cut of diplomatic ties with Doha as international agencies have reduced Qatar’s credit rating.
Meanwhile, international companies have decided to suspend shipping services to Qatar, and the size of the trade pressures that besiege Doha has increased in light of the closure of land, sea and air ports with several countries that announced boycotting Qatar.
International agencies’ decision to reduce Qatar’s credit rating is considered a factor that threatens Doha’s ability to complete the projects for World Cup 2022 with the same ambitions as before, because the cost of borrowing for the government of Qatar and for major Qatari companies will be much higher than the past; as a result of Doha’s low credit rating and the amounting of the value of the public debt to 150 percent of the GDP.
Economic effects of cutting diplomatic ties with Qatar have extended to the suspension of Qatari riyal transactions by a number of central banks of the countries that decided to boycott Doha.
In the past few days, the sale and purchase transactions in Qatar Riyals have been suspended between Qatari banks and some other banks, indicating the great difficulties that will face the Qatari economy and the financial sector in the country in the next phase.
In a common matter, Taiwan’s Evergreen and Hong Kong’s OOCL said on Wednesday they had suspended shipping services to Qatar in another sign of trade pressure on the state after Arab states severed diplomatic ties this week.
Evergreen, the world’s no.6 container shipping line, said in a statement that “in light of the blockade imposed on Qatar” it had suspended services until further notice.
On the other hand, Qatar’s stock market tumbled more than seven percent on Monday as six of the Middle Eastern country’s neighbors reportedly severed diplomatic relations with Doha for allegedly supporting terrorism.