UAE – Mubasher: Capital Intelligence Ratings (CI Ratings) affirmed the UAE’s long-term foreign currency rating (LT FCR) and long-term local currency rating (LT LCR) at 'AA-'.
The sovereign's short-term foreign currency rating (ST FCR) and short-term local currency rating (ST LCR) were affirmed at 'A1+'. The outlook for the ratings remains stable, according to a recent report released by CI Ratings.
The ratings capture the continued strength of the UAE's external position and are underpinned by the stable domestic political situation and high GDP per capita.
CI Ratings said the UAE’s economy is expected to have fallen by 6.6% during 2020, compared with growth of 1.7% in 2019. This is attributable to the repercussions of the coronavirus pandemic.
Furthermore, it noted the Gulf country is expected to have posted a budget deficit of 10% of GDP last year, compared to a deficit of 1.8% in 2019, marred by declining revenue, rising current spending, and lower oil prices.
The consolidated budget deficit is expected to narrow to 3.8% of GDP this year and to 2.5% in 2022, assuming an average oil price of $45 a barrel.
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