One of the adverse effects of the illegal siege of Qatar, which started last year, was the downgrading of Qatar’s banking sector to ‘negative’ by Global credit rating agency Moody’s.

However, in yet another sign that the country is breaking the shackles of the illegal blockade, Moody’s have upgraded Qatar’s banking sector to ‘stable.’

It reflects the agency’s belief that Qatar’s economy and banking sector is resilient to the blockade, reported Gulf Times.     

The rating agency particularly noted that Qatar’s banking sector profitability would remain ‘stable,’ with capital buffers remaining ‘strong.’

Moody's Investors Service has changed its outlook for Qatar's banking system to stable from negative, reflecting resilience of its economy and banking system to the ongoing regional dispute, as well as the stable outlook on the Government of Qatar's Aa3 long-term rating.

— Joan Gralla (@JoanGralla) October 4, 2018

What it means is that Qatar has been able to rebalance the country’s economy following the start of the blockade last year. The high level of government spending on infrastructure, in preparation for the 2022 FIFA World Cup, has remained unaffected.

Moody’s expect Qatar’s average real GDP growth to be 2.8% between 2018 and 2022, up from just 1.6% in 2017, reported The Peninsula.

“The Qatari economy has rebalanced as supply chain disruptions recovered rapidly following the blockade from other Gulf states and Egypt,” said Nitish Bhojnagarwala, Vice-President and Senior Credit Officer at Moody’s.

“Likewise, the banking system rebalanced its funding profile with the reduced liquidity from GCC sources offset by inflows from government and related entities,” he added.

Public sector inflows stabilised domestic liquidity, which reduced Qatari banks’ reliance on market funding and offset funding pressures caused by the ongoing dispute.

Qatar remains among the fastest growing economies in the GCC region, with momentum fuelled by government-financed infrastructure projects.