UAE, Saudi Arabia sovereign borrowings to hit $51.4bln this year: S&P

Total commercial debt issuance across EMEA to remain elevated at $571bln

  
Aerial view of urban skyline and skyscrapers in Dubai UAE. Image used for illustrative purpose

Aerial view of urban skyline and skyscrapers in Dubai UAE. Image used for illustrative purpose

Getty Images

Sovereign borrowings in the UAE and Saudi Arabia will remain elevated this year, although slightly down by just $6.6 billion to $51.4 billion, according to the latest analysis by S&P Global Ratings.

Gross commercial long-term borrowing in Abu Dhabi is forecast to reach $10 billion, compared to $15 billion in 2020, while Sharjah is likely to borrow $4.1 billion, up from $3 billion last year. In Saudi Arabia, sovereign borrowing is forecast to reach $37.3 billion, a little less than last year’s $40 billion.

Overall, emerging markets’ (EM) commercial debt issuance in Europe, Middle East and Africa (EMEA) will reach $571 billion, lower by $100 billion when compared with 2020.

“We expect commercial debt issuance to remain elevated during 2021, albeit down by just over $100 billion… as fiscal support is only gradually withdrawn,” S&P said in a report released on Tuesday.

Gulf sovereigns

Within the Gulf Cooperation Council (GCC) region, Saudi Arabia will once against set to be the largest sovereign issuer, followed by Oman, which is expected to borrow $10.8 billion in 2021, up from $4.1 billion last year.

The fourth-biggest issuer, Qatar will borrow equivalent to $7.4 billion, down from last year’s $24.1 billion.

Bahrain and Kuwait are expected to borrow $6.7 billion and $3.3 billion, respectively.

Europe, Middle East, Africa

Last year, countries in EMEA borrowed a total of $672 billion, up 50 percent ($120 billion) from the previous year, as governments boosted fiscal support from companies and households affected by the coronavirus pandemic.

For this year, a little over half of the sovereigns’ gross borrowing will be used to refinance maturing long-term debt, resulting in an estimated net borrowing requirement of $273 billion, compared to last year’s $395 billion historical high, according to S&P.

(Reporting by Cleofe Maceda; editing by Seban Scaria)

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2021

More From Wealth Management