There were no downgrades in any sovereign ratings in the Middle East in 2009 by Moody’s, which indicates the comparative resilience of the region’s credit fundamentals and the sovereign ratings should “stay the course” this year, Moody’s said in its first annual “Middle East Sovereign Outlook” report.
According to the rating agency, 2010 should be a year of improvement for the Middle East as a sluggish global recovery gains momentum and investor confidence rebuilds.
Moody’s only sovereign rating actions in the region so far this year have been positive: the upgrade of Saudi Arabia’s government bond ratings to Aa3 from A1 and Oman’s to A1 from A2 based on the strong state of their government finances.
“The Middle East had a relatively ‘mild crisis’ in that it suffered less damage as a result of the global economic and financial turmoil of the past two years than some other regions. This stands it in good stead as the world economy recuperates,” said Tristan Cooper, a Vice-President and Senior Credit Officer in Moody’s Sovereign Risk Group.
“Overall, the Middle East sovereigns did not experience anything like the deterioration in credit metrics that we saw in some other regions in 2009 – most notably the advanced industrialized countries and Eastern Europe,” he said.
According to the report, financial sectors in the region were not heavily exposed to “toxic” assets or failed western financial institutions during 2008 and 2009.