Regional geopolitical tensions are a tail risk which could escalate and disrupt Qatari exports; according to international credit rating agency Moody’s. However, the agency said Qatar’s ‘Aa2’ government bond rating and stable outlook continue to be underpinned by hydrocarbon-driven high economic and government financial strengths. Moody’s determines a country’s sovereign rating by assessing it on the basis of four key factors – economic strength, institutional strength, government financial strength and susceptibility to event risk - as well as the interplay between them. Qatar’s very high economic strength factors in the country’s strong economic growth and prodigious natural resource base, which make the economic prospects favourable and have generated an “exceptionally” high level of wealth, Moody’s said in its annual credit report. Qatar has capitalised on rising global demand for clean energy by developing its liquefied natural gas (LNG) export capacity to become the world’s largest, it said, finding that the bulk of demand growth is driven by East and Southeast Asian markets. Qatar’s very high government financial strength is supported by the long run of large budget surpluses and accumulation of assets - despite the recent rise in the level of budget expenditure and public-sector debt - and its low fiscal breakeven oil price. Susceptibility to event risk, the fourth methodological factor, is scored at the moderate level for Qatar, reflecting regional geopolitical risks, it said. Observing that, of late, such risks are hinging on rising tensions over Iran’s nuclear programme, Moody’s said “should tensions escalate to a confrontation, Qatar’s LNG shipments through the Strait of Hormuz could be disrupted.” Qatar’s high degree of institutional strength is reflected in the World Bank’s Worldwide governance surveys which rank most of Qatar’s key indicators in line with those of rating peers. Another factor that Moody’s took into account was the government’s default-free payment record. Qatar’s political voice and government accountability score is, however, lower than that of most A-rated governments, although it is broadly similar to that of other Gulf Co-operation Council countries, according to the rating agency. Yet Qatar has one of the highest income levels globally, and social unrest has not been a feature of Qatar’s political landscape, the report noted. From gulf times.