According to Philipp Lotter, senior vice president at Moody's Middle East, the size of the emirate’s liabilities will continue to grow faster than the economy as a whole for at least the next five years.

During that time the emirate will be most vulnerable to any slowdown in economic growth or other shocks such as a collapse of the real estate market.

The warnings come in a report issued by Moody’s on 13 October, Demystifying Dubai Inc.

Dubai’s economy is dominated by government-owned companies and groups such as Dubai Holding, Dubai World and Investment Corporation of Dubai.

"While this system has proved successful to date, cumulative liabilities are currently rising faster than investments are able to generate returns, says Philipp Lotter, a co-author of the report.

"In most countries there are identifiable delineations between the public and private sectors", adds Tristan Cooper, vice president at Moody's Middle East and also a co-author of the report.

"In Dubai, however, the state corporatist model plus the fact that the ruler and his closest relatives form the core of the government make it difficult to draw such distinctions.”

Moody’s currently rates six government-related bodies in Dubai. Dubai Holding, DIFC Investments, DP World, Dubai Electricity & Water Authority and Jebel Ali Free Zone are all rated A1. Emaar Properties is rated A3.

Moody’s says it expects Abu Dhabi to assist its neighbour in the event of any difficulties at Dubai government firms.