- Upgraded rating is based on the Emirate’s stronger medium-term growth prospects on the back of multiple, large-scale investment projects and economic diversification plans
May 21, 2024, Ras Al Khaimah, United Arab Emirates: Ras Al Khaimah’s credit rating has been upgraded to ‘A+’ from the previous ‘A’, by the international credit rating agency Fitch Ratings. The upgrade reflects the Emirate’s improved credit metrics driven by stronger medium-term growth forecasts. The growth forecasts for the Emirate are based on large investment projects and further economic diversification.
Ras Al Khaimah’s mega tourism projects, including world-class hotels, luxurious beach resorts and high-end leisure facilities are seen as promising opportunities for investors and a catalyst to attract further investment into the Emirate, increasing its economic resilience, according to Fitch Ratings, one of the ‘Big Three’ credit ratings agencies.
These projects have played a key role in boosting investor confidence and Ras Al Khaimah is projected to continue to attract global investments, resulting in growth forecasts of 6.2% in 2024 and 5% in 2025 for the Emirate.
Commenting on the upgraded rating, a spokesperson for Ras Al Khaimah Government said: “Ras Al Khaimah’s A+ credit rating is owed to the strong economic fundamentals of the Emirate, based on the vision and directives of our leadership. The Emirate has experienced significant growth over several years to become an attractive investment and tourism hub, and an ideal destination to live, work and explore.”
The spokesperson added: “The Fitch report will further boost investor confidence in Ras Al Khaimah and shine a light on its business and economic opportunities. It reflects the strong institutional governance and policy framework that the Emirate has implemented over the years, establishing a solid foundation for its growth. We look forward to robust growth in the upcoming period as our mega projects and cross-sector sustainable development plans begin to take shape.”
Higher projected government revenue has also contributed to boosting Ras Al Khaimah’s credit rating. Ras Al Khaimah’s government revenue was forecast to increase to 22.9% of GDP in 2024 from 21.5% in 2023 and 20% in 2022. The improved revenue forecast for the Emirate is based on the investment projects and the introduction of the country-wide corporate tax. As more projects start operations, the Emirate stands to earn a higher tax revenue, adding to the income forecast for 2026, which is expected to be higher than the projected figure of 21.8% in 2025.
Fitch highlighted Ras Al Khaimah’s improved governance of State-Owned Enterprises (SOEs), data collection and macro-fiscal planning and control frameworks, which support more efficient use of fiscal resources and help strengthen policymaking. It also mentioned the advantage the Emirate gained from a comfortable level of liquid assets.
Ras Al Khaimah, the northernmost of the UAE’s seven Emirates, is home to a thriving manufacturing and industrial sector, which is the main contributor to overall GDP, representing about 30%. The rest of the Emirate’s GDP composition is split over a variety of complementary sectors, highlighting the diverse nature of the economy and its ability to attract and retain businesses, from SMEs to large international companies.
