Sign in
S&P Global has maintained Sharjah’s long- and short-term foreign- and local-currency sovereign credit rating at BBB-/A-3 with a stable outlook, the ratings agency said in a statement. S&P also affirmed the emirate’s transfer and convertibility assessment — S&P’s view on the likelihood that a non-sovereign entity could face restricted access to FX, to ensure the sovereign has the ability to meet debt requirements — at AA+.
The rationale: The ratings agency held the ratings steady anticipating “fiscal deficits to gradually narrow over 2024-2027, owing to the government’s revenue-enhancing measures, the UAE-wide implementation of corporate tax, and favorable economic growth prospects in Sharjah.”
Sharjah faces the risk of a downgrade “if net general government debt [continues] to rise, for example due to delays in implementing the fiscal consolidation plan or weaker economic growth. This could then further increase the government’s already high debt-service costs,” the ratings agency said.
The ratings agency has revised its forecast for the emirate’s GDP growth in 2025 and through 2027 on the back of “strong private-sector activity,” according to S&P. The ratings agency maintained its growth outlook for 2024 at 2.5%, but said it expects the emirate’s GDP to grow at a 2.7% clip in 2025, 3.0% in 2026, and 3.0% in 2027. This is an upgrade from the previously penciled in 2.0% growth forecast for each of 2025 and 2026.
Sharjah’s economy is “relatively diverse,” S&P said, expecting the emirate’s five biggest sectors — construction, wholesale and retail trade, real estate activities, manufacturing, and financial services — to support the growth.
OTHER KEY INDICATORS-
- The budget deficit will narrow to 5.7% this year;
- Debt will fall to 55% of GDP this year before inching up to 60% in 2027;
- GDP per capita is expected to grow between 1.5-2.0% through 2027.
