Dubai – Mubasher: Moody's Investors Service placed on Friday the 'Aa2' issuer rating of the United Arab Emirates on review for downgrade.
Moody's review will assess the extent of the impact of the further sharp fall in oil prices, which it expects to remain low for several years, on the UAE's economic performance and its government balance sheet over the coming years.
In particular, the review will allow Moody's to determine the extent to which the UAE's more diverse economy and quite large financial buffers insulate it from the need to take a rating action to reflect the impact of the price shock.
The UAE depends on hydrocarbons to drive economic growth and to finance government expenditure, albeit not to quite the same extent as its regional peers. Oil and gas accounted for over 27% of goods exports and roughly 34% of GDP in 2014. It also provided around 64% of consolidated government revenue, according to the rating agency.
