RAK economy outlook rated stable by Fitch

SOUND ECONOMY: The RAK freezone is part of the emirate's industrial growth.

Fitch Ratings has affirmed the emirate of Ras Al Khaimah's (RAK) long-term foreign and local currency issuer default ratings (IDRs) with stable outlooks.

The short-term foreign currency IDR was also affirmed.

"Ras Al Khaimah enters a difficult year in a relatively comfortable position," said Richard Fox, head of Middle East and Africa Sovereign Ratings at Fitch.

"It completed a major infrastructure and borrowing programme in 2008 and now has no net financing need for the foreseeable future, with the budget projected to move back into surplus.

"Although economic growth will slow, alongside the slowdown in the UAE and other markets, it will remain supported by continued strong public investment in furtherance of RAK's ambition to develop and diversify the economy, while output is re-directed to faster growing parts of the region."

RAK's rating is underpinned first and foremost by its relatively low public debt ratio and prudent fiscal track record, Fitch added.

A tripling in public investment last year, to more than 24 percent of GDP, brought a temporary increase in the budget deficit to 6.3 percent of GDP.

However, with capital investment falling to a more normal, albeit still high 12 percent of GDP this year, the budget should move back into a comfortable surplus.

Fitch said Dubai has been an important market for RAK's construction materials and the slowdown there and in the region in general would have a negative impact on RAK's growth in 2009.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM