Dubai: The sovereign debt ratings of some Middle East countries could be downgraded because of the surge in inflation in the region, ratings agency Moody's said yesterday.

The ratings of poorer, non-oil-exporting countries such as Egypt, Jordan and Lebanon are more likely to be affected in the shorter term by high inflation because of their increased social and economic vulnerabilities.
But even the wealthy oil-exporting Gulf states could be affected over the longer term if inflation persists, Moody's said in its report Middle East: resurgent inflation sharpens fiscal and political risks.

Poor ratings result in a higher cost of borrowing for a debt issuer. The region has seen a significant growth in recent years in bond issues for funding large-scale projects.

Gulfnews: Inflation likely to hit ratings.