Credit By: Khaleej Times
S&P Global Ratings, the largest of the Big Three credit-rating agencies, has upgraded Ras Al Khaimah’s economic outlook from ‘Stable’ to ‘Positive,’ reflecting increased confidence in the emirate’s potential for growth that could surpass expectations. The agency maintains an A-/A2 long and short-term foreign and local currency sovereign credit rating on RAK.
1. Economic Strength and Diversification
The revised outlook underscores the foundational strength of Ras Al Khaimah’s economy, emphasizing diversification, consistent long-term policy-making, and robust economic foundations. Strategic investments, especially in the tourism sector, are highlighted as contributing to the emirate’s economic resilience and attractiveness to investors.
2. Building Momentum and Tourism Projects
S&P Global Ratings believes momentum is building in Ras Al Khaimah’s economy, driven by a solid pipeline of construction activity from tourism projects anticipated over the next five to six years. The reassessment reflects a positive outlook on the emirate’s economic trajectory.
3. Factors Contributing to Growth
Ras Al Khaimah continues to benefit from non-oil growth and infrastructure spending within the UAE, the GCC, and the Indian subcontinent. The mining sector, economic free zones, real estate, and ports are mentioned explicitly as sectors reaping the rewards.
4. Economic Diversification
S&P Global Ratings notes that Ras Al Khaimah’s economy is diversified, with no single sector dominating economic activity. The balance in economic development is highlighted, with manufacturing, wholesale and retail trade, construction/real estate activities, and mining collectively contributing around 50% to GDP.
5. Fiscal Strength and Membership in the UAE
Ras Al Khaimah’s position as a member of the UAE is considered a source of fiscal strength and stability. The benefits of UAE membership, including significant federal expenditure within the emirate, are highlighted by S&P Global Ratings as contributing factors to the positive outlook.
6. Potential for Further Rating Increase
S&P Global Ratings suggests the possibility of further rating increases in the next two years if Ras Al Khaimah’s economic prospects continue to strengthen. This positive assessment reflects ongoing confidence in the emirate’s economic trajectory and potential for sustained growth.
The upgraded outlook by S&P Global Ratings positions Ras Al Khaimah as a promising economic hub with diversified sectors, strategic investments, and a solid foundation for sustained growth, contributing to the emirate’s attractiveness for investors and stakeholders.
Follow ARP Media for more informative blogs.