International ratings agency Standard and Poor's on Sunday affirmed Qatar's negative outlook and predicted slower growth for Doha due to GCC boycott.

S&P said Doha is selling its assets in order to support its financial sector and limit the impact of amidst tightening fiscal position.

"We expect the ongoing boycott of Qatar's economy will lead to slower economic growth and hamper fiscal and external performance as outflows of external financing are offset by drawing upon government assets," S&P analysts said on Sunday.

It said the negative outlook reflects potential consequences of the boycott on Qatar's economic, fiscal, and external metrics, especially if the boycott is tightened or prolonged.

Earlier this month, Moody's Investors Service also downgraded Qatari banks due to their weakening operating conditions and the potential weakening of Doha's ability to support its financial sectors.

S&P warned that it could lower ratings on Qatar if the boycott reduces economic wealth levels to an extent that it no longer assess GDP per capita as a sufficient cushion to offset Qatar's weak trend growth rate. "We could lower the ratings if policy predictability in Qatar were to become more uncertain."

It said that in order to support its economy and banking system, the Qatari government is liquidating and utilising part of its fiscal assets. "If our estimate of the government's liquid assets were to fall substantially, we could also lower the ratings," the international ratings agency said.

Source: Khaleej Times