Rating agency Moody’s cut its 2020 outlook for the Gulf Cooperation Council’s (GCC) non-financial corporates to ‘negative’ from ‘stable’, citing geopolitical tensions and low oil prices.
“Low non-oil GDP growth and heightened geopolitical tensions weigh on investor sentiment and consumer confidence,” Moody’s said in a report released on Monday.
Moody’s maintained its ‘negative’ outlook rating for Turkish non-financial corporates, saying that there is “limited” clarity on economic reforms.
The New York-based agency also cited high foreign currency volatility and vulnerable financial institutions.
An OPEC+ decision to deepen an output cut deal by another 500,000 barrels per day will lead to slow economic growth in the GCC next year, said Moody’s, which expects oil to be in the range of $55 to $75 a barrel in the same period.
OPEC and allied crude oil exporters further deepened their oil production cuts earlier this month in response to weak global demand for the commodity.
Last month, Moody’s maintained its ‘stable’ rating outlook for GCC banks.