Dubai – Mubasher: Fitch Ratings has affirmed the emirate of Ras Al Khaimah's (RAK) long-term issuer default ratings (IDRs) at “A”, with a stable outlook.
The rating agency relied on the benefits of the emirate's membership as part of the UAE, low government debt burden, in addition to the high gross domestic product (GDP) per capita and governance indicators that it found close to the “A” median, it said in a report released late Monday.
“We expect the debt of the government and its trading entities (state-owned enterprises; SOEs) to fall to around 20% of GDP in 2018 from 33% in 2015,” Fitch Ratings highlighted, noting that RAK's government debt excluding SOEs is forecast to fall to 11% of GDP by the end of 2018.
Meanwhile, government/SOE cash deposits will be around 7% of GDP, while listed domestic equity investments will be around 12% of GDP.
The RAK government's fiscal surplus narrowed to 1.4% of GDP in 2017, compared to 3.6% in the prior year. Fitch expects a fiscal surplus of 0.7% of GDP during the current year.
“Further expansion of capital spending and the wage bill will outweigh revenue growth, principally in state-owned rock quarries and hotels,” the agency added.
