DUBAI: The diplomatic dispute between Qatar and its neighbors, including members of the Gulf Cooperation Council (GCC), is detrimental to the credit outlook for all GCC countries, with Doha and Bahrain being most exposed, Moody’s Investors Service said in a report on Wednesday.
“The severity of the diplomatic dispute between Gulf countries is unprecedented, which magnifies the uncertainty over the ultimate economic, fiscal and social impact on the GCC as a whole,” said Steffen Dyck, Moody’s Vice President — Senior Credit Officer and co-author of the report.
“While we expect the GCC to overcome its divisions, tensions persisting — or even escalating — would be the most credit negative for Qatar and Bahrain.”
Saudi Arabia, Egypt, the UAE and Bahrain cut diplomatic and trade ties with Qatar in June, accusing the government of supporting and funding terrorism, an allegation that Doha has denied.
Qatar faces large economic, financial and social costs stemming from related travel and trade restrictions more than three months since the diplomatic row began, Moody’s said, and the country’s future credit trajectory will depend heavily on the evolution of the dispute.
The impact to-date has been most acute for the trade, tourism and banking sectors with capital outflow estimated at $30 billion between June and July, and expected to further widen as GCC banks have opted not to roll over their deposits, Moody’s said.
The ratings agency also estimated that Qatar deployed $38.5 billion, equivalent to 23 percent of the Gulf state’s GDP, to support the economy in the two first months of the sanctions.
“Although negative foreign investor sentiment has also increased Qatar’s financing costs and led to capital outflows, Moody’s does not expect Qatar to raise funds in the international capital markets this year. This should cushion Qatar against higher funding costs for the time being,” it said.
Bahrain, however, is most vulnerable should the regional tension escalate, Moody’s said.
“Rising debt, increased issuance from other GCC sovereigns, and rising US interest rates have put pressure on Bahrain’s financing costs since 2014. The broad-based deterioration of Bahrain’s credit profile and its diminished shock absorption capacity makes it susceptible to any reassessment of risk by foreign investors.”
Manama’s strong alliance with Saudi Arabia and the UAE, which have provided support in the past, mitigates this risk to some extent, Moody’s said, although the “form and timeliness of such support lacks clarity.”
“The tensions highlight intra-GCC divisions, and although Moody’s believes that a realignment within the GCC is unlikely, the diplomatic rift will inevitably impair the functioning of the grouping, the more so the longer it persists,” the ratings agency said.
Diplomatic row a risk for GCC members’ credit outlook, Moody’s says
Diplomatic row a risk for GCC members’ credit outlook, Moody’s says
Egypt inflation slows to 10.1% in January: CAPMAS
JEDDAH: Egypt’s annual inflation eased to 10.1 percent in January from 10.3 percent a month earlier, while consumer prices rose sharply on a monthly basis, highlighting persistent pressure on household costs.
The consumer price index climbed to 268.1 points in January from 264.2 in December, the Central Agency for Public Mobilization and Statistics, also known as CAPMAS, said. Monthly inflation accelerated to 1.5 percent, compared with 0.1 percent in December.
The government has stressed measures to contain inflation, with directives from President Abdel Fattah El-Sisi calling for coordination between the Central Bank of Egypt and the Ministry of Finance.
Earlier, Prime Minister Mostafa Madbouli said these efforts aim to curb inflation pressures, support economic stability and encourage private sector growth.
In its latest report, CAPMAS stated: “Among the most important indicators in price changes.... an increase in the prices of the grains and bread group by 0.1 percent, the meat and poultry group by 5.1 percent, the fish and seafood group by 1.7 percent, the dairy, cheese, and eggs group by 0.5 percent, the oils, and fats group by 0.2 percent.”
Price movements in January contrasted with patterns seen in December 2025. Essential food and beverage categories recorded significant increases after some declines in the previous month. The meat and poultry group rose 5.1 percent in January following a 1.1 percent decline in December.
Vegetables increased by 8.5 percent after falling 2 percent in December, while coffee, tea, and cocoa rose by 6.7 percent, up from 0.1 percent. Fish and seafood increased by 1.7 percent, dairy, cheese, and eggs by 0.5 percent, grains and bread by 0.1 percent, and tobacco and oils and fats rose by 0.7 percent and 0.2 percent, respectively.
Housing-related costs continued to rise, with actual rents up 1.6 percent, imputed rents up 1.9 percent, and housing maintenance and repair up 0.8 percent.
The report also showed hospital services increased by 3.4 percent, while outpatient clinic services rose by 1.0 percent, compared with December increases of 1.8 percent and 1.0 percent, respectively.
Other consumer categories recorded moderate increases. Clothing and accessories rose by 1.4 percent, ready-made clothing by 1.1 percent, footwear by 0.4 percent, and cleaning, repair, and clothing rental by 1.0 percent.
Personal care increased by 0.6 percent and transport services rose 0.3 percent, while household items and equipment rose between 0.2 percent and 0.7 percent.
On the other hand, fruit prices decreased by 2.5 percent, and home appliances declined by 0.4 percent, continuing trends from December in some sectors.
