After a pandemic, Ras Al Khaimah (RAK) can expect its economy to grow by around 2.5% between 2021 and 2024 – such is the assessment of credit rating agency S&P Global in its latest assessment of the emirate.
Awarding the emirate a rating of A-/Stable/A-2, S&P Global says that its forecast is predicated on the expectation that RAK’s government will continue to maintain its prudent fiscal stance over the next two years, with its optimistic growth assessment supported by the relatively high levels of wealth generated by Ras Al Khaimah’s diversified economy.
In addition, S&P Global points out that the UAE’s efforts to combat the pandemic have been successful, noting that new cases of COVID-19 and related deaths have been low compared to the rest of the region and globally.
“This is extremely good news for Ras Al Khaimah, with S&P Global’s latest credit rating report injecting new confidence into the economy. The positive outlook is a result of fiscal prudence and also of the progressive measures we have taken over the years to diversify our economy. It can also be attributed to the strong local and national efforts to address Covid-19, with the UAE having fully vaccinated about 85% of its population so far,” commented an official spokesperson from the Government of Ras Al Khaimah.
Economic growth in RAK was estimated at 3% in 2021, with the first half of the year showing a strong rebound from 2020, buoyed by real estate transactions, mining volumes, cargo trade, and tourist arrivals.
Near-term, the agency expects a broad-based recovery in RAK, supported by increased demand for RAK’s mining sector as global demand rises. They highlighted increased demand from Stevin Rock, one of the largest quarrying companies in the world, which is supplying rock to build artificial islands for Abu Dhabi National Oil Company’s Al Hail and Al Ghasha gas projects, which produce gas from the Al Hail and Al Ghasha offshore concessions, as well as the contract the company signed in April 2021 to supply material for the construction of Etihad Rail’s, the developer of the UAE’s National Rail Network, rail network from RAK to Abu Dhabi.
S&P Global also cited Ras Al Khaimah’s position within the federation as a strength underpinning stability. RAK’s rating assessment, according to the agency, incorporates the government’s low revenue base supported by UAE federal expenditure within the emirate, stating that the underlying advantages of UAE membership include low external risks and the likelihood that the UAE would provide assistance if needed.