Mega-projects aid in upgrade of Ras Al Khaimah’s rating

Wam

Fitch has upgraded Ras Al Khaimah’s credit rating from A to A+ thanks to the launch of a number of large investment projects.

The emirate’s mega tourism projects, including hotels, beach resorts and high-end leisure facilities, offer promising opportunities for investors and are a catalyst to attract new investment, the rating agency added.

Fitch forecasts that the construction phase of the UAE’s first casino resort project, estimated to cost around $4 billion, will help increase the emirate’s real GDP growth by two percentage points (pp) each in 2024 and 2025, respectively. 

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The announcement of two new master plans, RAK Central and Beach District, in January this year has already raised some interest from domestic and foreign investors.

These projects will contribute to a medium-term growth forecast of 6.2 percent in 2024 and 5 percent in 2025, the rating agency said.

The outlook was maintained at stable, thanks to the significant share of mandatory spending undertaken by the UAE government.

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Ras Al Khaimah’s A+ credit rating is owed to the strong economic fundamentals of the emirate, Wam, the UAE’s state-run news agency reported, quoting a government spokesperson.

The emirate, one of the seven that makes up the UAE, has experienced significant growth over several years to become an attractive investment and tourism centre, and an ideal destination to live, work and explore, the spokesperson said.

“We look forward to robust growth in the upcoming period as our mega-projects and cross-sector sustainable development plans begin to take shape.”

Ftich expects Ras Al Khaimah’s government revenue to increase to 22.9 percent of GDP in 2024 from 21.5 percent in 2023 and 20 percent in 2022. The increase will be driven by investment projects and the introduction of the nation-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 beat the projected figure of 21.8 percent in 2025.