GCC issuers are expected to remain resilient, although credit conditions in emerging markets may weaken over the coming quarters, S&P Global Ratings has said.

However, the GCC resilience is subject to any unexpected increase in geopolitical risk or a significant reduction in oil prices, it added.

The US tariffs are likely to impair economic growth, investment, and market sentiment, the rating agency said, warning that financing conditions for emerging markets may deteriorate.

The interest-rate trajectory is uncertain, volatile market conditions are likely to increase borrowing costs and restrict market access for sectors impacted by tariffs.    

S&P has lowered its oil price forecasts for 2025-2028 to reflect weaker underlying fundamentals and the OPEC+ decision to increase oil supply.

Despite lower oil expectations, the rating agency raised its unsolicited long-term sovereign credit rating on Saudi Arabia to “A+” amid ongoing social and economic transformation, including deepening domestic capital markets.

The sovereign upgrade also led to higher ratings for Saudi-Arabia-based banks and corporates.               
            

(Editing by Seban Scaria seban.scaria@lseg.com )