Qatar’s government has spent some $38.5 billion (equivalent to 23 percent of its GDP) to support the economy in just the first two months of the Gulf crisis, a new report has found.

According to ratings agency Moody’s, some $30 billion has also left Qatar’s banks during the same time period, “with further declines expected as GCC banks opt not to roll over their deposits.”

In a report released this week, the agency said that the dispute is increasing uncertainty in the region and could spur negative credit outlooks for all GCC nations.

Moody’s added that amid the “unprecedented” dispute, Qatar and Bahrain face the biggest financial risks.

The blockade of Qatar has particularly hurt its trade, tourism and banking sectors, the report said.

“Qatar’s future credit trajectory will depend heavily on the evolution of the dispute,” it added.

Bahrain ‘exposed’

Qatar isn’t the only country reeling from the Gulf dispute.

Bahrain, which has been weakened by civil unrest since 2011, has seen climbing debt put pressure on its financing costs.

“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,” Moody’s said.

Because the country is currently aligned with Saudi Arabia and the UAE, it may have some support to mitigate its risk. But details about how remain unclear, the report said.

‘Impaired functioning’

It’s been more than 100 days since Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic and economic ties with Qatar.

Hopes were briefly raised about the Emir and Saudi’s Crown Prince spoke on the phone last week for the first time about the crisis.

But Saudi Arabia broke off communications shortly after that for a protocol dispute.

Authorities from all countries have previously said the dispute could go on for months or even years.

But such a case would be bad news for the region’s finances, Moody’s said.

“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 report concluded.

Thoughts?