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S&P upgrades Ras Al Khaimah’s credit rating to A/A-1 on stronger growth outlook: S&P Global Ratings upgraded Ras Al Khaimah’s (RAK) long- and short-term foreign and local currency sovereign credit ratings to A/A-1 from A-/A-2, with a stable outlook, according to a statement. The upgrade reflects stronger growth prospects and resilient fiscal performance.
New tourism projects are to thank: The growth forecast is primarily driven by a “solid pipeline of tourism-related development projects in RAK,” including the Wynn Al Marjan Island integrated resort, set to open in early 2027. The project, which is being developed in collaboration with state-owned enterprises RAK Hospitality Holding and Marjan, is expected to contribute 40% of RAK’s GDP.
The improved rating is supported by a strong pipeline of tourism-related projects, including the Wynn Al Marjan Island integrated resort, which is expected to open in early 2027. The project—developed with state-owned enterprises RAK Hospitality Holding and Marjan—is projected to contribute 40% of RAK’s GDP.
Non-oil growth is expected to be supported by sectors including mining, economic freezones, real estate, and ports, the report said. These sectors are poised to gain from robust non-oil growth and increased infrastructure investment across the UAE, the GCC, and the Indian subcontinent.
Real GDP is set to grow by over 4% annually from this year to 2027, with GDP per capita projected to rise to USD 32.8k by 2027 from USD 30k in 2024.
The government is expected to maintain fiscal surpluses averaging 1.9% of GDP over 2024-2027, supported by conservative fiscal management and a net asset position of about 18% of GDP, the report said.
The downside risk: RAK could face a downgrade if public finances weaken due to significant cost overruns or underperformance of development projects. Rising interest costs relative to revenue could also pressure the rating.
OTHER KEY INDICATORS-
- Government debt is low, at approximately 8% of GDP in 2024;
- Revenue will comprise 11.8% of GDP from 2024-2027, up from 10% in 2023.
