Mubasher: S&P Global Ratings affirmed its 'A/A-1' long- and short-term foreign and local currency sovereign credit ratings on Ras Al Khaimah (RAK), with “Stable” outlook.
The ratings on RAK are backed by the emirate’s strong fiscal and external positions, according to a statement.
RAK will receive extraordinary financial support from the UAE) if it faces financial stress, although the need will not arise, S&P noted.
The “Stable” outlook reflects the ratings agency’s expectation that “RAK's fiscal account will be largely insulated from weaker demand from the GCC region”.
S&P expects real GDP growth to average almost 3% per year over 2016-2019, down from 4%, the statement said, adding that the current slowdown in RAK's economy results from weaker regional demand due to low oil prices, which have led to reduced investments.
The government's debt burden is low and likely to decline to about 10% of GDP by 2019 as debt instruments mature, the agency said.
