American credit rating agency S&P Global has revealed that Ras Al Khaimah (RAK) can expect a booming economy post-pandemic, with growth expected to rebound to roughly 2.5 percent between 2021 and 2024.
Awarding the emirate a rating of A-/Stable/A-2, S&P Global has expected that RAK’s government will continue to maintain its prudent fiscal stance over the next two years, with its optimistic growth assessment supported by the relatively high levels of wealth generated by emirates’ diversified economy.
S&P Global also highlighted the success of local and federal efforts to combat the pandemic as a factor in the UAE’s optimistic economic outlook, noting that new cases of COVID-19 and related mortality in the UAE have been low compared to the rest of the region and globally.
“This is extremely good news for Ras Al Khaimah, with S&P Global’s latest credit rating report injecting new confidence into the economy. The positive outlook is a result of fiscal prudence and also of the progressive measures we have taken over the years to diversify our economy. It can also be attributed to the strong local and national efforts to address COVID-19, with the UAE having fully vaccinated about 85 percent of its population so far,” commented an official spokesperson from the Government of Ras Al Khaimah.
S&P Global estimated RAK’s economic growth at 3 percent in 2021, with the first half of the year showing a strong rebound from 2020, buoyed by real estate transactions, mining volumes, cargo trade, and tourist arrivals. In the near term, the agency expects a broad-based recovery in RAK, supported by increased demand for RAK’s mining sector as global demand picks up.
According to S&P Global, Ras Al Khaimah’s position in the federation is an inherent strength that underpins stability. The agency stated that its rating assessment takes into account the government’s low revenue base, which is supported by UAE federal expenditure within the emirate, and that the benefits of UAE membership include low external risks and the likelihood that the UAE would assist RAK in the case of a problem.
