Fitch Ratings Elevates Ras Al Khaimah To A+ Credit Rating Amid Economic Growth

Ras Al Khaimah’s credit rating has been upgraded to ‘A+’ from the previous ‘A’ by Fitch Ratings, reflecting the emirate’s improved credit metrics driven by stronger medium-term growth forecasts. These forecasts 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. These projects have played a key role in boosting investor confidence, with the emirate projected to attract global investments. Growth forecasts stand at 6.2% in 2024 and 5% in 2025.

A spokesperson for Ras Al Khaimah Government commented that the A+ credit rating is due to the strong economic fundamentals of the emirate, based on the vision and directives of its leadership. The emirate has experienced significant growth over several years, becoming an attractive investment and tourism hub.

The spokesperson added that the Fitch report will further boost investor confidence in Ras Al Khaimah and highlight its business and economic opportunities. The report reflects the strong institutional governance and policy framework that the Emirate has implemented over the years.

Revenue Projections

Higher projected government revenue has also contributed to boosting Ras Al Khaimah’s credit rating. Government revenue is forecast to increase to 22.9% of GDP in 2024 from 21.5% in 2023 and 20% in 2022. The improved revenue forecast is based on investment projects and the introduction of a country-wide corporate tax.

Governance and Fiscal Planning

Fitch highlighted Ras Al Khaimah’s improved governance of State-Owned Enterprises (SOEs), data collection, and macro-fiscal planning and control frameworks. These measures support more efficient use of fiscal resources and help strengthen policymaking. The Emirate also benefits from a comfortable level of liquid assets.

Diverse Economic Composition

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 its diverse economy.

This diversity enables Ras Al Khaimah to attract and retain businesses ranging from SMEs to large international companies. The emirate's strategic initiatives continue to foster an environment conducive to sustainable growth and economic resilience.

With inputs from WAM